On 6th February 2025, the Bank of England announced a cut in the base rate from 4.75% to 4.50%. This decision has significant implications for mortgage holders, whether you have a fixed, variable, or tracker mortgage.

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Why Has the Bank Cut Interest Rates?

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The Bank of England adjusts interest rates to manage inflation and economic stability. This rate cut has been introduced in response to slowing economic growth and lower-than-expected inflation figures. By reducing borrowing costs, the Bank aims to encourage spending and investment, helping to stimulate the economy. The decision reflects efforts to balance economic growth while keeping inflation within target levels.

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Economists anticipate that there may be further reductions throughout 2025 if inflation continues to trend downward and economic conditions warrant additional stimulus. This means mortgage rates could remain favorable for those looking to secure a better deal.

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What Does This Interest Rate Change Mean for You?

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Tracker & Variable Rate Mortgage Holders

If you’re on a tracker mortgage, which directly follows the base rate, or a variable rate mortgage, your interest rate is likely to decrease. This means your monthly mortgage payments could become more affordable.

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Fixed-Rate Mortgage Holders

‍ If you’re on a fixed-rate mortgage, your current payments won’t change. However, if you’re nearing the end of your fixed term, this could be a great opportunity to secure a new deal at a lower rate.

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First-Time Buyers & Remortgaging Homeowners

‍Lower interest rates could mean better mortgage deals becoming available. If you’re considering buying your first home or looking to remortgage, now is a great time to review your options.

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What Should You Do Next?

Every mortgage situation is unique. To understand how this rate change affects you, it's crucial to review your mortgage terms and consider speaking with an expert. At PBS Mortgage & Financial Advisers, we can help you find the best mortgage deal tailored to your circumstances.

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📞 Call us on 01524 888877

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📧 Email advice@pbsfinancial.co.uk

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🌐 Visit our contact page: https://www.pbsfinancial.co.uk/contact

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