‘Great news’ for 629,000 homeowners as mortgage rates set to be cut ‘immediately’ by Bank of England

Around 629,000 homeowners with tracker mortgages will see an immediate benefit from the rate cut, with monthly repayments expected to decrease by approximately £29.

A similar number of households on variable rate deals could also see savings, as lenders face pressure to reduce their rates in line with the Bank of England’s decision.

While fixed-rate mortgages won’t see immediate changes, analysts are reminding the public that a rate cut could lead to better deals for new borrowers or those looking to renew their mortgages.

Adrian MacDiarmid, the head of Mortgage Lender Relations at Barratt Redrow, expects high street banks, building societies and lenders to lower mortgage rates following the cut.

“This is great news for both existing homeowners and buyers, offering a welcome sense of stability in what has been an unpredictable market,” the mortgage expert explained.

MacDiarmid urged potential buyers to act quickly before stamp duty threshold changes take effect from April 1 and highlighted opportunities for buyers to access competitive rates.

Specifically, he noted that schemes like Own New Rate Reducer enable buyers to secure rates from as low as 1.66 per cent, “significantly reducing their monthly payments in the early years of the mortgage.”

Terry Higgins, the group managing director of TNHG New Build Mortgages, explains that lower Bank rates typically translate to reduced borrowing costs across the board.

Higgins shared: “For UK homeowners who are on a variable or tracker-rate mortgage, these cuts could lead to lower monthly repayments.”

He highlighted that the changes could make property ownership more accessible for future buyers, who might be able to borrow more due to improved affordability.

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Higgins advised those approaching remortgage to monitor rate forecasts carefully, as further cuts could emerge throughout the year. “By switching to a mortgage with a lower interest rate, homeowners can reduce their monthly payments further or shorten the term of their loan,” he added.

Ahead of today”s announcement, analysts have shared their prediction that the central bank will slash the base rate multiple times in 2025 to ease the financial pressure on borrowers.

However, the Bank of England’s Governor Andrew Bailey has indicated a cautious approach to future rate adjustments and has not committed to a set timeline for pending cuts.

Speaking in December, when rates were held at 4.75 per cent Bailey emphasised the Bank would take a “gradual approach to future interest rate cuts.”