The meeting of the MPC (Money Policy Committee) ended on the 6th of February 2025; the MPC voted 7-2 to reduce the bank rate by 0.25 percent. The interest rate has been cut to 4.5%.
So, what does this mean for people looking for mortgages at the moment?
For those looking to get onto the property ladder or looking to refinance, the drop in base rate is encouraging. It is hopeful that the base rate drop will have a knock-on effect with lenders reducing their fixed rate products too.
For any borrowers who are on variable rate products (including the standard variable rate), you should see a reduction in your monthly payments from your lender.
We asked Mortgage Expert Nicola Henton her thoughts on the news, and she said,
“The 0.25% drop from the Bank of England is definitely a positive move.
I’m hopeful that we’ll see more competitive pricing from lenders in the weeks ahead, though we’re still in a bit of uncertain territory with ongoing volatility in both the UK and the US.
I'm hoping that rates continue to drop throughout the year as things (hopefully!) begin to stabilise- if only I had a crystal ball!
As always, it’s a good idea to get professional advice before making any changes to your mortgage."
For the full Bank of England Report please click here.
To find out how this news could help your mortgage journey, please get in touch with us for advice about the effects of the interest rate drop at hello@hellomortgage.co.uk
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