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UK Mortgage Rates Drop Below 4% Following Bank of England Rate Cut

The Bank of England’s 0.25% rate reduction to 4.25% has spurred widespread mortgage rate cuts, while US buyers face elevated rates as the Fed holds steady.

In an aerial view, single family homes neighbor open space on April 19, 2025 in Thousand Oaks, California.
A home on the market.
Image

Overview

  • The Bank of England reduced its base rate to 4.25%, prompting major UK lenders to lower mortgage rates and reintroduce sub-4% fixed deals.
  • Tracker mortgage holders in the UK will save approximately £29 per month, translating to nearly £350 annually, due to the rate cut.
  • In the US, the Federal Reserve maintained its federal funds rate at 4.25–4.50%, keeping 30-year fixed mortgage rates near 6.90%, the highest in two months.
  • Many US homebuyers are delaying purchases as they await potential rate cuts later in 2025, with affordability remaining a significant barrier.
  • UK mortgage competition intensifies as lenders aim to attract borrowers with reduced rates, signaling renewed momentum in the housing market.