Interest rate cut to 4.5% could mean more affordable mortgages
06 February 2025
The Bank of England has cut the interest rate from 4.75% to 4.5%, the lowest since June 2023. What does this mean for anyone looking to buy a home in 2025?
The latest news that the Bank of England interest rate has been cut 0.25% to 4.5% was widely predicted, and is the third time the rate has been cut in the past 12 months.
This is an interesting update for first-time buyers and anyone else thinking of buying a new home, as mortgage rates are likely to follow suit.
In fact, several lenders have already reduced rates across some of their offerings. Halifax has cut their homemover and first-time buyer deals by up to 0.11%, while providers including Nationwide and HSBC are also reducing rates on select products.
It’s also good news for many homeowners who are currently paying a mortgage. The BBC has reported that homeowners on tracker deal will see an average drop in payments of £29, according to banking trade body UK Finance. Those on standard variable rate mortgages are likely to see their payments fall too, if lenders match the lower base rate.
However, prospective buyers will have to be selective about which option they choose. Certain mortgage deals have seen rate increases, as lenders consider future changes to the interest rate.
So, is now a good time to buy a new house?
The answer is yes, if you are able to access a mortgage product with a more favourable rate. There’s the added incentive of acting quickly to save thousands on Stamp Duty, due to threshold changes that will come into effect on 1st April.
Buyers in the UK and Northern Ireland will have to complete by 31st March to take advantage of the current rates. After this, both first time buyers and existing homeowners might have to pay more to move. You can find out more about Stamp Duty here.
And, if you’re thinking about buying a new Persimmon home but need a little extra support, we could give you a helping hand with Flexi Boost. From contributions towards your deposit, Finishing Touches or Stamp Duty, we can provide tailored offers to make your move more affordable. Or, if you have a house to sell and want a guaranteed buyer, we could help you take that step with our popular Part Exchange scheme.
