On May 8, 2025, the Bank of England announced a reduction to the base interest rate, bringing it down from 4.5% to 4.25%. It’s the fourth cut in less than a year, and while this might feel like a small adjustment, it could open up meaningful opportunities for homeowners and first-time buyers.
Here's our take on what the rate change means in real terms, and how you can take advantage of it.
If you’ve already got a mortgage
On a fixed rate?
No changes for now. Most UK homeowners are on fixed-rate mortgages, so your monthly repayments won’t be affected immediately. But if your current deal will end in the next 6 months, it’s well worth starting a conversation about your next steps. Lower rates are making a comeback, and you may be able to secure a more competitive deal than you expected.
On a tracker mortgage?
You’ll see an immediate benefit. Because tracker mortgages follow the Bank of England base rate, this latest drop means your repayments will go down by around £29 per month for the average borrower.
On a standard variable rate (SVR)?
It depends on your lender. Some may pass on the rate cut, which could mean a small monthly saving (around £14 on average). But SVRs are still some of the most expensive ways to borrow, so if you're on one, now’s a good time to talk to us about your options.
Thinking about buying your first home?
You may be in a better position than you realise.
We’re seeing some of the most competitive fixed rates in months, with major lenders now offering deals under 4%. According to market forecasts, we could see two-year fixes fall to around 3.5% later this year – and five-year deals not far behind.
This rate cut, combined with a steady flow of new listings and softer price growth in many areas, could make now a good time to take that first step onto the property ladder.
If you’re remortgaging this year…
There’s a strong reason to act early.
Around 1.6 million fixed-rate mortgages are due to end in 2025. If yours is one of them, there’s a good chance you can now secure a better rate than what was on offer even a few months ago.
Many lenders will let you lock in a new deal up to six months in advance, so you don’t need to wait until your current one ends to get started. It’s worth checking what’s out there now, and we can help you find something that suits your plans.
What’s happening in the market right now?
Activity varies by region, but the general trend is that lower rates are breathing some life back into the market.
In more expensive areas, like London and the South East, we’re still seeing a more cautious approach due to affordability pressures and recent stamp duty changes.
But in the North, Wales and the Midlands, where homes are generally more affordable, buyer activity is picking up.
Wherever you're based, having your mortgage in place gives you a stronger position to act when the right property comes along.
Talk to Tony
Interest rates may still shift again this year. The next Bank of England announcement is due on 8th August 2025. In the meantime, this rate cut is a reminder that the mortgage landscape is evolving, and it’s worth making sure you’re not missing out on a better deal.
At Skyline, we’re here to help you make sense of what this means for your plans, whether you're buying, remortgaging, or just weighing up your options.
Book a no-obligation online mortgage appointment with Tony at a time that suits you.
Your home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it. A fee may be charged for mortgage advice. The amount will depend on your circumstances.
Skyline Mortgage Consultants Limited is an Appointed Representative of The Right Mortgage Ltd, which is authorised and regulated by the Financial Conduct Authority. Skyline Mortgage Consultants LTD is registered in England and Wales Number 8157062. Company Registered Office: Suite130, 394 Muswell Hill Broadway Muswell Hill London N10 1DJ.