The Bank of England’s Monetary Policy Committee voted 8-1 to cut the base rate by quarter of a percentage point from 5% to 4.75% in November, bringing some early festive cheer to homeowners and buyers.
It’s the second time the Committee has trimmed rates this year, and the first time that the base rate has been below 5% since June 2023.
Recent days have seen an increase in swap rates following the Budget, causing a number of lenders to nudge their fixed rates upwards. This could continue unless funding costs start to ease back following today’s announcement.
What the rate cut means for your mortgage
Homeowners on variable tracker mortgages, which typically follow movements in the base rate, will see their monthly payments reduce following the base rate cut. If, however, you have any other type of variable rate mortgage, or you’re currently paying your lender’s standard variable rate, there are no guarantees that the rate cut will be passed on in full - it’ll be up to the discretion of your lender.
Our SVR watch provides a rundown of which lenders have adjusted their rates in response to the rate cut. Bear in mind that if you are on an SVR, the chances are you could significantly reduce your monthly mortgage costs by moving to a cheaper deal.
If you have a fixed rate mortgage, you won’t see any immediate change in your mortgage payments. If you’re coming to the end of your deal however, it’s important to review the market as soon as possible, bearing in mind the recent increases.
Applying for a deal now will avoid any further increases, but you can still review your deal if rates start to fall.
Our Rate Check Service allows you to keep an eye on market movements and review your options if a better deal becomes available.
