Bank of England Rate Cut to 4%—What It Means for Your Mortgage

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The Bank of England has slashed its base rate to the lowest level since early 2023 — here’s what homeowners and savers need to know.

On 7 August 2025, the Bank of England (BoE) reduced its Bank Rate by 0.25 percentage points, from 4.25% to 4%, marking the fifth cut in the past year and the lowest level since March 2023. This move reflects heightened concerns over rising unemployment and weak economic growth, even as inflation remains elevated

The MPC’s decision was narrowly reached in a 5–4 vote, requiring an unprecedented second round of voting. Governor Andrew Bailey emphasised a “gradual and cautious” approach amid lingering inflationary pressures.

With inflation at 3.6% (expected to peak near 4% by September), rising unemployment (now around 4.7%) and sluggish growth, the Bank faces a delicate balancing act between supporting households and keeping inflation anchored.

Implications for Mortgage Holders

The rate cut has direct implications for various mortgage products:

  • Tracker Mortgages: Homeowners with base-rate tracker mortgages will see immediate reductions in their monthly payments.
  • Standard Variable Rate (SVR) Mortgages: Borrowers on SVRs, changes depend on individual lenders. If lenders pass on the full rate cut.
  • Fixed-Rate Mortgages: While existing fixed-rate mortgage holders won’t see immediate changes, those nearing the end of their fixed terms may benefit from more competitive rates as lenders adjust their offerings in response to the base rate cut.

How Belle Maison Mortgage Solutions Can Assist

At Belle Maison Mortgages, we understand that changes in the base rate can influence your financial decisions. Our team is dedicated to providing personalised advice to help you navigate these changes, whether you’re considering a new mortgage, looking to remortgage, or seeking protection solutions.

Your home/property may be repossessed if you do not keep up repayments on your mortgage.

Belle Maison Mortgages is a trading name of Belle Maison Mortgage Solutions Ltd who are an Appointed Representative of HL Partnership Limited which is authorised and regulated by the Financial Conduct Authority.

Belle Maison Mortgage Solutions Ltd are registered in England and Wales with company number 13608188. Registered Office: Beckwith House, 2 Womersley Park Gardens, Womersley, Doncaster, North Yorkshire, England, DN6 9GA.

There may be a fee for mortgage advice. The precise amount of the fee will depend upon your circumstances but will range from £250 to £795 and this will be discussed and agreed with you at the earliest opportunity.

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