If you’re a homeowner or buyer, a falling base rate is generally welcome. Mortgage rates tend to follow suit, making borrowing more affordable. But the impact isn’t always immediate.

Most homeowners are on fixed-rate mortgages—roughly 85% of the market, according to UK Finance—so they won’t see an instant reduction in their monthly repayments. However, if you're on a tracker mortgage, you’ll likely notice the effect straight away, as these products move in line with the base rate.

What About New Mortgage Deals?

The positive news is that mortgage rates have already been trending downward in anticipation of this cut. The average two-year fixed rate is now at its lowest since September 2022. For buyers in our region:

• With a 40% deposit: Nationwide is offering two- and five-year fixes as low as 3.84%.
• With a 25% deposit: Rates start around 3.94%.
• With a 10% deposit: Rates can be found from 4.39%.

For a £200,000 mortgage over 25 years, that could mean repayments of just over £1,000 a month.

While this is encouraging, experts advise a measured outlook. Ravesh Patel of Reside Mortgages notes that lenders remain cautious, awaiting more sustained rate cuts before dropping prices dramatically.

Will Mortgage Rates Keep Falling?

Current market forecasts suggest interest rates could drop to 3.5% by Christmas, with two or three more 0.25% cuts expected this year. This would likely support further, though modest, mortgage rate reductions.

Still, as April Mortgages’ Rachael Hunnisett explains, much of this expectation is already factored into today’s fixed mortgage pricing. So while lower rates may still be on the horizon, they might not drop dramatically unless economic conditions shift.

Our advice? If you’re planning to buy or remortgage soon, don’t delay in the hope of better deals—especially in a competitive housing market like ours.

Savers: Prepare for Falling Rates

The flip side of lower interest rates is that savers are likely to earn less on their deposits. Easy-access savings accounts, in particular, are expected to be affected quickly.

Currently, the best easy-access rates sit around 4.75%, but these are expected to fall below 4.5% in the coming weeks. Fixed-rate bonds, especially one-year deals, may also see reductions if the base rate continues its downward trajectory.

What Should Savers Do Now?

• Act fast: Lock in competitive fixed-rate savings while they’re still available.
• Use your ISA allowance: Some cash ISAs are offering excellent rates and come with tax-free interest.
• Shop around: If your provider lowers your rate more than the 0.25% base rate cut, it may be time to switch.

Some of the best current deals include:

• Easy-access: Atom Bank at 4.75%
• 1-year fixed: Access Bank at 4.55%
• 2- to 5-year fixed: JN Bank at 4.48%

All are fully protected under the Financial Services Compensation Scheme.

What This Means for the Property Market in Essex and Suffolk

With mortgage rates on a downward trend, we may see a renewed sense of confidence among buyers. For sellers, this could mean increased interest and faster-moving transactions. For landlords, falling rates might offer an opportunity to refinance portfolios on more favourable terms.

At Boydens, we’re keeping a close eye on these market movements to ensure our clients make informed decisions. Whether you’re thinking of moving, investing, or just need advice, our local teams across North Essex and Suffolk are here to help.

Get in touch with your local Boydens branch today for tailored advice on buying, selling, letting or renting in a shifting interest rate landscape.