STOP THE PRESS! Base rate cut to 4% – What does this mean for you?

The Bank of England has cut the Base Rate to 4%, marking the third reduction this year – and it's great news for homeowners, buyers, and movers alike.

At Burnett’s Estate Agents, we’re seeing the market shift in your favour. Lower mortgage rates, cheaper borrowing, and better affordability are all making it easier to buy or move home than it has been in months.


The Highlights:

  • Lower borrowing costs – mortgage interest rates are coming down!
  • Increased affordability – banks are adjusting their affordability checks.
  • More choice – the highest number of homes for sale in a decade!
  • Competition among lenders – more deals on the table for you.

 

Why This Matters

The Base Rate has been reduced by 0.25% to 4%, a move widely expected by the markets. It's designed to help stimulate the economy, keep inflation in check (currently at 3.6%), and ease the pressure on households.

This is a turning point. With rates falling and lenders adjusting their stress tests, buying power is increasing—giving homebuyers the ability to borrow more responsibly and affordably.

 

Mortgage Rates Are Coming Down

  • Average 2-year fixed mortgage: 4.51% — down 0.73% compared to last year.
  • Average 5-year fixed mortgage: 4.51% — down 0.35% from this time last year.

Fixed-rate mortgages are now more balanced, with 2- and 5-year deals almost identical. That’s a strong indicator of greater stability and confidence returning to the market.

 

What If You're On a Mortgage Now?

  • Fixed-rate mortgage: Your monthly payments won’t change until your deal ends.
  • Tracker or variable mortgage: Expect your payments to go down in line with the Base Rate cut.
  • Remortgaging soon? This could be the perfect time to lock in a better deal before SVRs (currently averaging 7.31%) kick in.

 

Improved Affordability = More Buyers Can Move

Lenders use the Base Rate to determine how much they’re willing to lend. With the Base Rate down, affordability stress tests are softening, meaning:

  • More people qualify for mortgages
  • You could borrow more without overstretching
  • It’s easier to upsize, downsize, or finally get your foot on the ladder

 

What’s Next?

Markets expect one more rate cut before the end of 2025, possibly down to 3.75%. That means this trend of falling mortgage rates and improving affordability could continue – so now may be the ideal time to act.

 

Thinking of Moving?

Don’t miss this opportunity to make your move in a cheaper, more affordable housing market. Contact Burnett’s Estate Agents today for expert advice, the latest listings, and mortgage support.



Source: Rightmove

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