August's UK interest rate cut to 5% was the first drop in more than four years, releasing some pressure on borrowers as the Bank of England was encouraged by signs that inflation has slowed. Governor Andrew Bailey, who voted for a cut, said “inflationary pressures have eased enough that we’ve been able to cut interest rates today”. Borrowing costs had been held at 5.25% – the highest level in 16 years – since August last year.

It means that while rates remain elevated, mortgage costs could start to come down further while savings rates offered by banks could be reduced. The Bank of England expects the UK economy to grow by 1.25% this year, higher than its previous outlook of a 0.5% rise. It kept its outlook the same for economic growth in 2025 which it expects to dip to 1%.

The mortgage market changes all the time, not just in terms of mortgage deals and regulation but also in the way lenders assess loan applications. It is not as simple as looking for the lender with the cheapest rate, or insurer with the cheapest premium. Yes, the interest rate or premium is key as a starting point and today the UK interest rate cut to 5% is the first drop in more than four years. However, how might that change in the short, medium or long term?

We undertake a comprehensive review of other key factors that affect the real cost to you. For example, some lenders charge arrangement fees that can be large enough to make the overall cost of lending unattractive, when compared to others.

We offer a mortgage review service that is representative of the whole of the market. After we have assessed your needs, we will advise and make recommendations for you. Our recommendations will be made following a comprehensive and fair analysis of the mortgage market.

The interest rate cut to 5% is the first drop since 2020, get in touch today to see if we can find you a suitbale mortgage deal.