The Bank of England has decided to cut the base rate once again, which is great news if you’re looking for a cheaper mortgage deal. The BOH’s decision means lower mortgage rates for home movers, property investors and first time buyers.
When the cost of mortgages falls, buying a property becomes more affordable and the housing market picks up. This is not just good for the UK economy; it can also be helpful for home movers. When more buyers enter the market, sellers are more likely to secure a sale. Conversely, when buyer numbers rise, sellers feel more confident about listing their homes and buyers therefore have more properties to choose from.
What’s happening to mortgage rates now?
The recent Bank of England interest rate cut is the latest move in a gradual process designed to curb inflation. The BOH made several quarter per cent reductions between November 2024 and May 2025, cutting the base rate by a whole percentage point over that time. As the rate changed from 5.25 to 4.25 per cent, mortgage costs became cheaper.
How does that affect my mortgage payments?
The latest drop means that many homebuyers can expect to see a £15 reduction for every £100,000 worth of their mortgage. Homeowners who are currently paying into tracker mortgages will benefit immediately from reduced monthly payments, while those on Standard Variable Rate deals should also pay less.
Homebuyers on fixed mortgage rates will pay the same monthly rate until the set period of their deal ends. After that they will be able to take advantage of the lower rate (mortgage customers can usually lock in a lower rate up to six months before the end of their current deal).
How much does a new mortgage cost now?
Some major lenders have already cut their rates in response to the BOH’s recent reduction. Below is an example of four high street lenders who dropped their Standard Variable Rate (SVR) soon after the BOH’s announcement in
May:
Barclays: 7.99 to 7.74 per cent
Lloyds: 6.5 to 6.25 per cent
Natwest: 7.49 to 7.24 per cent
Halifax: 7.99 to 7.74 per cent
Our estate agents in Ilford agree with our Newbury Park estate agents that research is essential if you want to find the best deal. When you’ve chosen a property and decided whether you need a Fixed Rate, Tracker, Standard Variable or specialist mortgage, it’s time to explore the market. Of course, a lot will depend on the value of your new home and the size of deposit you are able to provide. As a rule, the larger your deposit when set against the value of your property (known as ‘loan to value’ or LTV), the cheaper your mortgage will be.
Mortgage comparison sites will show you some, but not all, of the mortgage deals available. These sites are limited in their ability to list every mortgage product because the market is extremely complex, and some deals are only accessible through certain mortgage brokers.
After you have researched current rates and deals, you could consult the mortgage advisor at your local bank or building society or approach a reputable mortgage broker. There are good reasons for sharing your plans with a mortgage professional. They can provide you with expert support and advice, as well as alerting you quickly when a better deal becomes available.
Will we see more mortgage rate cuts in future?
While buyers may be hoping for further cuts this year, the Bank of England won’t be drawn on its plans. The committee responsible for setting the base rate meets every six weeks to consider factors such as the speed of price rises, UK growth rates and global developments.
The Bank says it takes a “gradual and careful” approach when making adjustments to the base rate and will only act if economic pressures continue to ease. However, experts believe we could see a further cut – or even two – this year if the UK economy continues to grow.
What if the rate changes after my mortgage is approved?
If the rate drops after you have agreed a mortgage deal, it should still be possible to swap to the lower rate before completing your property purchase (or, in cases of remortgaging, before your rate comes to an end).
Some lenders will automatically switch you to the lower rate, but others may require a new mortgage application. Always check with your lender or mortgage broker to understand how their policy is applied.
Where can I get expert advice on East London property?
The recent mortgage rate drop has already led to more market activity, with more buyers and sellers coming forward.
If you’d like help to find your ideal property in the East London area, why not get in touch with our local experts?
Call us at 020 3972 7341 or email info@oaklandestates.co.uk.
Meanwhile, if you’d like to find your dream home or properties to rent in Ilford, wanstead, Newbury Park, Barkingside and surrounding areas, check the below links
Properties for sale in Ilford and Barkingside
Properties to rent in Ilford and Barkingside
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