Bank of England Cuts Base Rate to 4%. What It Could Mean for You
Updated: 7 August 2025.
Why Has the Base Rate Dropped?
The Bank’s decision reflects easing inflation and a need to stimulate economic activity around a few areas. Whilst inflation still sits at 3.6%, the vote to reduce the base rate just passed by a very slim margin (5-4), which signals the first shift in monetary policy strategy in months. This is the 5th cut in a year, and whilst we are still someway above the initial 2% (inflation) target the rate reduction signals that The Bank of England feels confident enough that inflation is falling steadily and therefore is comfortable cutting interest rates to support economic growth.
What This Means for You
1. Tracker Mortgages and SVR Mortgage Customers: Expect Lower Monthly Payments
- If you are on a tracker mortgage you will see your repayments reduce, hopefully immediately from the next payment date.
- On average, a £140,000 mortgage could cost around £29 less per month.
- If you are on a Standard Variable Rate (SVR), lenders might reduce rates—but it’s not guaranteed.
Not sure what type of mortgage you’re on? Speak to The Mortgage Broker today and we’ll review it for free.
2. Remortgage: Good Time to Compare Mortgage Rates and Look at Lowering Your Monthly Payments.
- Many lenders are showing movement by cutting fixed-rate deals already.
- Main high street lenders have led the way and offering 2 to 5 year deals at lower than 3.8%.
You can save a considerable amount over the life of your mortgage.
Want to review today? Get in touch for a Free Review of your mortgage rate.
3. First Time Buyers: This could help Improve Your Affordability
- Lower rates = more borrowing power.
- You may now qualify for homes you couldn’t afford before the rate changes.
A Mortgage in Principle shows sellers and estate agents you’re a serious buyer.
4. Landlords & Investors: Enhanced Portfolio Potential
- Mortgage stress tests are improving.
- Growing your portfolio may now be more viable with better yields and borrowing options.
Many BTL lenders adjust quickly to base rate changes—ask us for a portfolio review.
Why The Mortgage Broker?
With over 2,500 5-star reviews and access to thousands of mortgage products, we deliver the perfect mix of digital speed and human trust. Whether you are buying, switching, or investing, we can help you find the answer you need.
Our Service Includes:
- Free Mortgage Reviews
- Instant Affordability Checks
- Same-Day Mortgage in Principle
- Access to 130+ Lenders
- Support for Complex Situations (self-employed, adverse credit, large loans)
Real FAQs We Answer Every Day
Is now a good time to remortgage? +
Yes. With rates falling, remortgaging could save you hundreds per month, especially if you’re on an SVR or coming off a fixed deal. We compare across the market to find your best deal.
Will my mortgage payments go down? +
If you are on a tracker mortgage, you will likely see a drop immediately. If you are on an SVR (standard variable rate), some lenders may reduce your rate, but it is not automatic in the same way as a tracker. A fixed rate mortgage will not change unless you remortgage or switch product.
Can I get a better deal right now? +
We don’t know without looking at your mortgage. But – fixed deals under 4% are returning and it is certainly worth a look. It entirely depends on your personal circumstances but that is why speaking with a mortgage broker matters, we can look real time at your circumstances and what is available across the market. .
How fast can I get a Mortgage in Principle? +
We can issue a Mortgage in Principle in under 15 minutes with a little information and no impact on your credit score. That means you can view or offer on properties today.
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