Base Rate Cut to 4.5%, Mortgage rates sub 4%

Consent

This site uses third party services that need your consent.

BOSH! Base Rate Cut to 4.5%, Mortgage rates sub 4% and GDP Growth

There is finally a bit of back-to-back good news for the UK economy. The base rate has come down, GDP has unexpectedly increased and some mortgage rates have reached below 4% again!

7 of the Bank of England MPC members voted to cut the base rate to 4.5%, a move that will have many people in the country breathing a slight sigh of relief (but still clutching their wallets), especially anyone connected to the property industry.

Governor Andrew Bailey reassured the public that the cut is "welcome news to many," though he also struck a cautious note, saying the Bank is keeping a close eye on the economy and moving carefully with any further rate reductions. Translation: we’re not out of the woods yet.

Unexpected Growth:

In the spirit of keeping us all on edge, the Bank has also downgraded its UK growth forecast for 2025 to a rather uninspiring 0.75%, down from a more optimistic 1.5%. Although GDP did grow, the economy is expected to find its feet again in 2026 and 2027, but in the short term, it’s looking like we’ll be tiptoeing around a technical recession.

For Chancellor Rachel Reeves, there was a sigh of relief with 2024 Q4 GDP figures which came in as follows.

The UK economy grew by 0.1% between October and December, surpassing expectations of a 0.1% decline.

December saw a 0.4% rise in GDP, driven by strong performances from pubs and bars, along with sectors like machinery manufacturing.

However, GDP per capita, which accounts for population growth, fell by 0.1% in the last quarter and over the entire year.

What Does This Mean for You?

Well, the interest rate affects everything from your mortgage to your savings account. A lower base rate should, in theory, make borrowing cheaper—good news for homeowners and businesses. On the flip side, savers might find their returns a little less exciting.

For every £1,000,000 you have in borrowing, your interest will reduce by £2,500 a year if your current borrowing is on a tracker mortgage.

See a snapshot of current best lending rates across the market:

Commercial Assets

5-year fixed rates from 5.9%

Tracker rates from 1.7% + Base Rate

Development Finance (minimum loan £2,000,000)

Rates from 3% Over base

Residential Portfolios (Minimum loan £500,000+)

5-year fixed rates from 5.05%

Tracker Rates from 1.5% + Base Rate

Residential Mortgages

5-year fixed rates from 3.99%

Buy To Let Mortgages

Fixed Rate - 5 year at 3.99%

Consent

BOSH! Base Rate Cut to 4.5%, Mortgage rates sub 4% and GDP Growth

There is finally a bit of back-to-back good news for the UK economy. The base rate has come down, GDP has unexpectedly increased and some mortgage rates have reached below 4% again!

7 of the Bank of England MPC members voted to cut the base rate to 4.5%, a move that will have many people in the country breathing a slight sigh of relief (but still clutching their wallets), especially anyone connected to the property industry.

Governor Andrew Bailey reassured the public that the cut is "welcome news to many," though he also struck a cautious note, saying the Bank is keeping a close eye on the economy and moving carefully with any further rate reductions. Translation: we’re not out of the woods yet.

Unexpected Growth:

For Chancellor Rachel Reeves, there was a sigh of relief with 2024 Q4 GDP figures which came in as follows.

The UK economy grew by 0.1% between October and December, surpassing expectations of a 0.1% decline.

December saw a 0.4% rise in GDP, driven by strong performances from pubs and bars, along with sectors like machinery manufacturing.

However, GDP per capita, which accounts for population growth, fell by 0.1% in the last quarter and over the entire year.

What Does This Mean for You?

Well, the interest rate affects everything from your mortgage to your savings account. A lower base rate should, in theory, make borrowing cheaper—good news for homeowners and businesses. On the flip side, savers might find their returns a little less exciting.

For every £1,000,000 you have in borrowing, your interest will reduce by £2,500 a year if your current borrowing is on a tracker mortgage.

See a snapshot of current best lending rates across the market:

Commercial Assets

5-year fixed rates from 5.9%

Tracker rates from 1.7% + Base Rate

Development Finance (minimum loan £2,000,000)

Rates from 3% Over base

Residential Portfolios (Minimum loan £500,000+)

5-year fixed rates from 5.05%

Tracker Rates from 1.5% + Base Rate

Residential Mortgages

5-year fixed rates from 3.99%

Buy To Let Mortgages

Fixed Rate - 5 year at 3.99%

Conclusion

With a base rate reduction in the first 6 weeks of the year, let's hope the rest of the year follows suit with the good news flowing. We believe 2025 will pose a great opportunity for businesses and individuals who are brave enough to double down and take decisive actions.