Bank of England Base Rate Announcement: November 2024

What does the new lower interest rate mean for you and your mortgage? 

You may have heard the recent news that the Bank of England has announced a further rate reduction, with the base rate now sitting at 4.75%. As the headlines roll in, we know that anyone with a mortgage – or looking to get one – will be wondering what this means.  

If you have questions about what the lower rate means for your mortgage – or your home sale – we'll walk you through it. Let’s start with the basics. 

What happened with interest rates today?  

The Bank of England voted today that interest rates will decrease from 5% to 4.75%. This is the second drop this year. Beforehand, the rate had stayed at 5.25% for a long time. So, a further decrease is big news. 

Why did the rate decrease?  

Interest rates are reviewed eight times a year, moving up and down (or staying the same) to help control inflation in the UK.  

Rates tend to rise to try and combat inflation. Higher rates encourage people to spend less, with the aim of lowering demand and bringing inflation down.  

A lower rate encourages people to spend their cash to help the economy grow. So, the decrease in rates since August indicates that inflation is under control.   

What does it mean for the housing market?  

It depends. In general, if there are higher rates, people borrowing money to buy a house will end up paying more for their mortgage, as the cost of borrowing is passed on. This scenario can mean fewer people are looking to buy houses, meaning the price of homes could drop.   

In the same vein, today’s lowering of the rate is encouraging for new buyers, as mortgages will likely become slightly more affordable. This could mean more buyers enter the market, increasing demand, and perhaps prices too. There are a lot of other factors that impact house prices though, so we'll have to wait and see. 

Check out September’s house price update here. 

What does the change mean for my mortgage?  

If your rate is locked in (often called a ‘fixed’ mortgage), that means there won’t be any immediate change. Your rate will stay the same until your fixed term ends – whatever the interest rate does. 

If you’re on a tracker mortgage or a standard variable rate (SVR), you could see an immediate change, as the monthly cost tends to move in line with the Bank of England base rate. They usually have a minimum rate though, and this is generally set at the amount you were paying at the start of the deal.  

A drop in rates is good news for first-time buyers, but for people looking to remortgage, rates are still much higher than they were 2-5 years ago.  

If your current rate is due to expire soon, it could be good to talk to a lender or broker, as moving onto the standard variable rate could mean you end up paying more than what you’re on now. 

What happens next time?   

We wish we knew! We don’t know what’s coming next, but we’ll be here to walk you through it. The Bank of England sets rates eight times a year, so we’ll be back soon with the next update. 

In the meantime, feel free to reach out – we’re here if you need us.