Base Rates Reduced to 5%

On the 1st of August, The Bank of England announced that the base rate had been reduced for the first time since March 2020 to 5%, down from 5.25%. 

The base rate reduction could have an impact on your current mortgage, and affect any future applications, so we’ve collated all the information you need to know about the changes. 

With the base rate decreasing from 5.25% to 5%, the interest rate lenders charge for mortgages may decrease with it. The personal impact of this could mean your monthly mortgage payments become more affordable, depending on your individual mortgage type. 

If you have a variable-rate mortgage, which includes tracker mortgages and standard variable-rate mortgages, your rate should change to reflect the current market. The exact rate will vary on your individual mortgage and the provider you are with.

If you have a fixed-rate mortgage your rates will not currently be affected by the base rate reduction and your current mortgage payments will remain the same. But, the good news is if you are looking for a new mortgage or to re-mortgage, your rate should change to reflect the reduced rate. 

Our managing director James Watts said: “For potential buyers who have been holding off on moving until interest rates decreased, the base rate change announcement is the news you have been waiting for.

“With the base rate now reduced to 5%, mortgage providers will begin to lower the rate of their mortgage products. This should mean that not only will your payments be lower, but your overall affordability should increase. 

“Lenders including HSBC, Halifax, Yorkshire Building Society and Santander were among the first to reduce the interest rates on mortgages, so if you have a mortgage agreed in principle, then you should consider speaking to your lender to get an updated agreement and look around for the best rates.” 

If you are ready to move and or want to find out more about how you could take advantage of the lower mortgage rates, head over to The Mortgage Maestro website here  to get a free initial consultation and find out more.

  Back