---
title: What bank rate cut means for homeowners and homebuyers
description: The Bank of England recently announced it was cutting the base rate from 4% to 3.75%. Here's what it means for people buying a house or who already own one
image: https://blog.anwylhomes.co.uk/hubfs/The%20Fairways%202.jpg
---
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# What bank rate cut means for homeowners and homebuyers
23 Dec 2025 [Anwyl Homes](https://blog.anwylhomes.co.uk/blog/author/anwyl-homes)
LOWER mortgage rates and lower monthly repayments as a result of the drop in the Bank of England base rate, could mean now is the time to buy a new home.
The Bank of England recently (December 18) announced it was cutting the base rate from 4% to 3.75%. When the base rate, also known as the bank rate, changes lenders and banks tend to change the interest rates they charge on borrowing such as mortgages.
Some lenders have started to lower the interest rates on their mortgage products and it’s anticipated this will lead to a more competitive mortgage market.
Lower interest rates on mortgages is good news for homebuyers. In simple terms it means their monthly mortgage repayments will be reduced.
For example, someone purchasing a home priced at £400,000 using a 75% loan-to-value mortgage of £300,000 at 4.71% would have had monthly mortgage repayments of £1,703 last year. Now, at 3.89% their equivalent monthly repayments would be £1,565.
#### What the change in interest rates could mean in real terms
| **House price** | **Loan amount (75%)** | **Monthly payment at 3.89% (now)** | **Monthly payment at 4.71% (last year)** |
| --- | --- | --- | --- |
| £300,000 | £225,000 | £1,174 | £1,278 |
| £400,000 | £300,000 | £1,565 | £1,703 |
| £500,000 | £375,000 | £1,957 | £2,129 |
| £600,000 | £450,000 | £2,348 | £2,555 |
| **House price** | **Loan amount (80%)** | **Monthly payment at 4.01% (now)** | **Monthly payment at 4.86% (last year)** |
| --- | --- | --- | --- |
| £300,000 | £240,000 | £1,268 | £1,384 |
| £400,000 | £320,000 | £1,691 | £1,845 |
| £500,000 | £400,000 | £2,114 | £2,306 |
| £600,000 | £480,000 | £2,536 | £2,767 |
| **House price** | **Loan amount (90%)** | **Monthly payment at 4.23% (now)** | **Monthly payment at 5.34% (last year)** |
| --- | --- | --- | --- |
| £300,000 | £270,000 | £1,470 | £1,639 |
| £400,000 | £360,000 | £1,960 | £2,185 |
| £500,000 | £450,000 | £2,450 | £2,731 |
| £600,000 | £540,000 | £2,940 | £3,277 |
We can put buyers in touch with independent financial advisers with access to the entire mortgage market. All our homes can potentially be purchased with a green mortgage and because they’re so efficient, homeowners should find their energy bills are considerably lower too.
\* Figures supplied by Acumen Mortgages
\*\* Rates quoted are as of 18/12/25. They are not guaranteed and are subject to change at any time.
\*\*\* Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
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