THE drop in interest rates is unlikely to benefit those looking for fixed mortgage deals, a leading expert has said.

Reacting to the Bank of England's decision to slash rates, Sam Fox, the founder of the UK Mortgage Centre, said: “It's good news for those who have a remortgage due and home movers, although we won’t see fixed deals immediately,change since lenders have already been lowering rates slowly in anticipation for this drop. On the other hand, with this base rate drop, it's expected to have a negative impact on the inflation rate. Inflation is currently 3.6%, and the Bank expects it to reach 4% by September so, overall, there are pluses and minuses here.”

Here, Sam answers the four key questions which many will be asking following the interest rate change.

What does it mean for borrowers?

The immediate impact of the base rate cut will be felt by those on Tracker Mortgages (around 590K borrowers) whose repayments are directly linked to the base rate and will therefore decrease in line with today’s decision.

Standard Variable Rate (SVR) mortgage borrowers may also see reductions, although this depends on whether their lender chooses to pass on the cut; if fully passed on, typical monthly savings could be in the region of £13-£14. (as an estimate)

For those looking for a new fixed-rate deal, there’s no immediate reaction from lenders to drop rates further. Lenders tend to price in expected base rate movements in advance, so current fixed-rate offers already reflect today’s adjustment. That’s not to say we won’t see further drops however.

How will this affect the market?

There will be limited immediate change to new fixed-rate mortgage deals, with average 2 and 5 year rates still sitting around 5% for now. That said, we are starting to see some downward movement, a few lenders are now offering 2-year fixes around 3.8%, and 5-year rates are edging closer to 4%, suggesting more competitive pricing could be on the way.

Current Market Rates
If you’re wondering where mortgage rates are now, here’s a quick roundup of the latest figures for both residential and buy-to-let.

Residential Mortgages
90% Loan-to-Value
For clients with a 10% deposit, here’s what the average rates are looking like:

2-Year Fixed: Around 4.59%
5-Year Fixed: Around 4.44%

These rates have remained fairly stable over the past few weeks, offering a bit of certainty for first-time buyers and those with smaller deposits.

Buy-to-Let Mortgages
75% Loan To Value
When it comes to buy-to-let, we’re seeing a consistent trend across lenders:

2-Year Fixed: Most standard products from names like HSBC, Leeds, Paragon, and Kent Reliance fall between 4.0% to 5.1%.
5-Year Fixed: A typical range right now sits between 4.1% to 5.5% depending on criteria.

*These figures are based on current product availability and may shift slightly depending on lender appetite and market movement. If you'd like more detailed insights or to talk through a specific scenario, we're always happy to help. All rates were correct at the time of writing,7th August 2025.

Will my mortgage repayments get cheaper?

If you’re currently on a fixed product, then nothing will change with your repayments.

If you’re on a tracker or SVR mortgage, you’ll likely see a drop in monthly payments pretty soon.

What does the rate drop mean for new mortgage deals?

Today's base rate drop is good news for anyone looking to take out a new deal.
In recent weeks, fixed-rate mortgages have become more affordable, with several lenders cutting their rates. Some are now offering two- and five-year deals below 4%.