The Bank of England on Thursday voted to cut the base rate for the first time since the onset of the pandemic. For anybody seeking to remortgage or purchase a home during the months ahead, we recommend getting financing in place well ahead of time.

Borrowers have endured many false dawns during the Bank of England’s battle against inflation.

Borrowing costs have looked set to fall on several occasions, most recently during the spring, only for price pressures to return, resuming upwards pressure on mortgage rates. The volatility has prompted some people to delay moving home. Mortgage borrowing for purchases has plateaued around 10% below pre-pandemic norms.

By voting to cut the base rate to 5.00%, the Bank’s Monetary Policy Committee has signalled that it believes the underlying sources of inflation are now under control. It’s forecasts published alongside the decision show the economy expanding 0.8% during the year to Q3 2025, before growth picks up to 1.4% and 1.7% during the following two years. The outlook looks more benign now than it has since before the pandemic.

These conditions make it much easier for borrowers push on with life decisions that had been put on hold. The decision paves the way for more, marginal cuts to mortgage rates, but the biggest impact will be on sentiment. Household views on the current and future trajectory of house prices were already rising in the wake of the July election (see chart), and those metrics look set to rise further during the weeks ahead.

A busy autumn beckons. For anybody seeking to remortgage or purchase a home during the months ahead, we recommend getting financing in place well ahead of time. Mortgage offers are generally valid for six months and can be renegotiated if better deals come available later.

Now is also a good time to revisit your strategy, whether you are planning a purchase or are due to remortgage. Our experts are always available to walk you through your options. Many borrowers that chose tracker products earlier this year are opting to exit those deals and fix, for example. The Bank of England would need to execute a fairly rapid set of rate reductions over the next two years if borrowers on tracker products are to save money, and that looks unlikely as conditions are today.

Markets expect the Bank to execute at least one more rate cut before the year is out, though much will depend on how the inflation data progresses. The Bank’s forecasts suggest the annual rate of inflation will pick up a little during the second half of this year, before falling below the 2% target during the following two years. That suggests that those opting for two-year fixed rates today can look forward to remortgaging at a lower rate at the end of their term.

If you are considering purchasing or remortgaging a home, please get in touch with one of our experienced brokers. We have relationships with over 200 lenders and we’d be happy to walk you through your options.