Interest Rates Fall to 4.25% – Compare 5 Top Mortgage Deals Before They’re Gone

Good news for homebuyers — the Bank of England has officially cut its base interest rate from 4.5% to 4.25%, marking the second rate cut of 2025 and the fourth since last year’s peak of 5.25%. With more reductions expected later this year, now could be a smart time to take advantage of improved mortgage pricing.

While the move is aimed at curbing inflation and boosting economic confidence, it also creates new opportunities for homebuyers, remortgagers, and property investors. However, with market competition on the rise, acting early could make all the difference in securing the most competitive deals.

At 12:02 BST on Thursday, the Bank of England confirmed a widely expected rate cut, dropping the base rate by 0.25 percentage points. This reduction is aimed at easing borrowing costs and stimulating the UK economy, as inflation remains slightly above the 2% target at 2.6%.

The decision offers immediate benefits to around 600,000 homeowners with tracker mortgages — who will see an average saving of £29 per month. But fixed-rate borrowers also have reasons to be optimistic. Although many lenders had already priced in the cut, competition is heating up and more rate drops could follow if inflation trends downward.

For those looking to remortgage or buy their first home, this could be a window of opportunity. The average two-year fixed mortgage rate currently sits at 5.15%, and the five-year at 5.08% — slightly lower than earlier this year, but still well above historical lows. Now more than ever, expert mortgage advice is essential.

While this rate cut signals good news, its full impact will depend on how lenders respond. Some will cut rates further, others may hold firm — especially with inflation expected to tick up temporarily due to rising energy bills and global economic uncertainties.

That’s why working with an expert broker is crucial. At Mortgage-Tek, we help homebuyers and remortgagers navigate these shifting conditions with clarity. Whether you're considering a fixed deal for long-term security or a tracker to benefit from falling rates, our team can guide you through the best route based on your goals and budget.

The current market also presents an affordability challenge. According to Moneyfacts, just 6% of mortgage products cater to borrowers with a 5% deposit. That makes strategic financial planning — and access to specialist lenders — more important than ever.

As the rate cut ripples through the market, don’t wait to act. More changes are likely on the horizon, and locking in a competitive deal today could mean big savings in the months ahead.

At Mortgage-Tek, our expert advisers specialise in finding competitive mortgage solutions that match your unique situation. Whether you’re a first-time buyer, remortgaging, or investing in property, we’re here to help you make smarter mortgage decisions in 2025.