Mark Chadwick – director of mortgages at PM+M

Today’s decision to cut the base rate to 3.75% is a welcome shift for the mortgage market, easing borrowing costs and improving affordability across the board. For first-time buyers, lower rates can help bring monthly repayments within reach, while existing homeowners may start to see some relief after a prolonged period of higher costs.  That said, lenders are still likely to take a measured approach, with affordability assessments, credit strength and wider economic conditions continuing to play a key role in lending decisions.

Homeowners on tracker or variable-rate mortgages should feel the benefit almost immediately, with lower monthly payments filtering through from the new year.

Fixed-rate pricing has already been moving in anticipation of a cut, and further reductions could follow as competition among lenders increases. Those coming to the end of a fixed deal, or considering a remortgage, may find more attractive options becoming available, although future rate movements remain finely balanced.  While further cuts are possible over the next six months, timing remains important, and securing longer-term stability will still be a priority for many households.

Lower rates may also encourage remortgaging for purposes such as home improvements or releasing equity, as borrowing becomes more affordable and manageable. Overall, this shift marks a cautiously positive turning point for the housing market, even if challenges around affordability and lender confidence have yet to fully ease.

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