Big news from the bigwigs at the Bank of England – they’ve just trimmed the Base Rate down to 4.25%, giving it a little off the top for the second time this year. February saw the first snip, March was a “let’s wait and see,” and now May brings another gentle shave. Slow and steady, like a cautious gardener pruning a hedge.

So, what does this actually mean for your mortgage? Is it time to pop champagne? Nearly, but not quite – but it is time to pop the kettle on and have a little read.

Why’s the Bank Cutting Rates Anyway?

The Bank of England meets every six weeks to talk money stuff. Their goal? Keep inflation on a leash (aiming for 2%, currently sitting at a spicy 2.6%) and make sure the economy doesn’t faceplant.

Too-high rates can slow spending, which can slow growth, which can lead to more people cancelling Netflix. Nobody wants that.

What’s Happening with Mortgage Rates?

Mortgage rates have been slowly gliding down like a leaf on a breeze. Nothing dramatic – more like a “granddad getting off the sofa” kind of pace.

• 2-year fixed rate: now averaging 4.64%

• 5-year fixed rate: slightly better at 4.60%

Basically, things are getting a little friendlier if you’re shopping around — and more drops might be on the way. No guarantees though. This is the mortgage world, not a freebie buffet.

What the Experts Are Saying (Spoiler: They’re Not Panicking Either)

Our pal Matt Smith – mortgage whiz and all-round finance nerd — reckons this cut was totally expected.

Yes, some folks were hoping for a bigger cut, like a 0.5% slash. But the Bank’s taking the “slow and steady wins the economic stability race” approach.

If the stars align (and no global chaos pops up – looking at you, geopolitics), we might end the year with a Base Rate as low as 3.75%. But again… might.

Fixed? Variable? Confused?

Let’s break it down:

• On a fixed-rate mortgage? Chill. Your payments aren’t changing until your deal ends.

• Tracker or variable mortgage? Congrats! Your payments might actually go down a bit thanks to this Base Rate cut.

• Deal ending soon? Time to start scoping your next move. Waiting too long could land you on the dreaded Standard Variable Rate (SVR), which is currently a spicy 7.5%. Yikes.

Mortgage Charter: Basically a Safety Net

If you’re sweating over repayments, the Mortgage Charter (launched July 2023) is still in play. It gives borrowers breathing room — letting you lock in a new rate up to six months early. Handy.

You can also remortgage to a new lender, but just know it’s not instant noodles — it takes time (and a little paperwork).

So, Can I Afford More Now?

Possibly! Lenders stress test your finances like a paranoid personal trainer — seeing if you could handle payments even if rates jump. If the Base Rate keeps easing down, those tests might get slightly less brutal. Think warm-up jog instead of hill sprints.

What’s Next?

The Bank meets again on 19 June 2025. Could we see more cuts? The markets think so. But whether we end the year at 3.75% or stay cruising at 4.25% depends on all the usual suspects: inflation, the global economy, and whether someone accidentally tweets something that tanks a currency.

Final Thought: Don’t Panic, Just Plan

Look, rates aren’t crashing back to 2021 levels anytime soon. But they are softening. If your mortgage deal is ending or you’re thinking of moving, now’s a great time to get savvy.

Use a mortgage calculator, chat to a broker, or just get in touch with us at CHILL — we’ll help you figure out what’s next, minus the suit-and-tie stress.