Barclays, HSBC and Nationwide reduce mortgage rates after Bank of England interest cut – see the full list

MORTGAGE lenders have swiftly reduced their rates following the Bank of England's decision to lower the base rate to 4.5% this afternoon. This move is set to benefit thousands of mortgage customers, including those with Barclays, HSBC and Nationwide, who will see a decrease in their monthly repayments. Customers with Aldermore, Santander and Virgin Money can also expect adjustments in the coming days and weeks.

The rate cut comes after several lenders preemptively reduced their fixed mortgage rates in anticipation of the Bank of England's decision, marking the third base rate reduction since 2020. For instance, Barclays lowered rates on purchase and remortgage products by up to 0.25 percentage points on Tuesday. The base rate, set by the Bank of England's Monetary Policy Committee (MPC), influences the interest rates lenders charge for savings and borrowing, including mortgages.

Earlier this afternoon, the MPC cut the base rate by 0.25 percentage points from 4.75% to 4.5%. The reduction is expected to bring relief to millions of mortgage holders, whose bills will now decrease. THE Bank of England uses interest rate adjustments as a tool to manage inflation, which tracks how quickly prices are rising across the economy. When inflation is high, the BoE typically raises interest rates to discourage spending and slow price increases.

Inflation has now fallen significantly to 2.5% per year, close to the Bank's 2% target, after peaking in recent years. At the same time, economic growth in the UK remains sluggish. The Bank of England has said it expects the UK economy to grow by 0.75% in 2025, down from a previous forecast of 1.5%, before accelerating in 2026. Lowering the base rate is intended to encourage greater spending and investment, providing a much-needed boost to the economy.

However, the reduction you'll see depends on the type of home loan you have. Those on tracker and standard variable rate (SVR) mortgages typically see an immediate change in payments. A tracker mortgage is a type of variable mortgage where your monthly payments rise and fall in line with the Bank of England base rate. With a tracker mortgage, you'll usually pay the base rate plus an additional percentage in interest each month.

A standard variable rate mortgage is what you revert to once any initial mortgage term ends. This rate will change in line with the base rate and is usually higher than any initial introductory rate. There are 629,000 customers on tracker mortgages and 693,000 on SVRs. A 0.25% base rate cut will save the average SVR customer £359 per year and the average tracker mortgage customer £206 per year. However, most mortgage customers won't benefit from today's change.

More than 6.8million customers on fixed-rate deals won't see any immediate changes. This is because their rates remain the fixed until their agreed mortgage term ends, at which point they can take out a new deal. Even if your lender has announced rate cuts, the timing of when your repayments decrease depends on your payment schedule. We've listed all the lenders cutting mortgage rates below. If you have a tracker or standard variable rate (SVR) mortgage with Aldermore, your mortgage rate will decrease by 0.25% on March 1, 2025.

For new customers, tracker and SVR rates will be repriced and adjusted earlier, taking effect from tomorrow (February 7). Just yesterday, Aldermore announced reductions across several buy-to-let and residential mortgage products for both new and existing borrowers. For new residential customers, two and five-year fixed-rate deals up to 80% loan-to-value (LTV) have been reduced by 0.2%, with rates now starting at 5.24%.

Three-year fixed-rate deals have also been cut by 0.15%, with rates now beginning at 5.64%. Existing residential borrowers will also benefit from reductions, as fixed-rate deals up to 80% LTV have been lowered by up to 0.2%, with rates now starting at 5.44%. If you have a tracker or standard variable rate (SVR) mortgage with Barclays, your mortgage rate will decrease by 0.25% on March 1, 2025. A Barclays spokesperson said: "Following the decision by the Bank of England to decrease its base rate, we will be decreasing our rates across tracker mortgage and Barclaycard products.".

The lender's fixed-rate mortgages remain unchanged. However, the bank did cut rates on fixed purchase and remortgage products by up to 0.25 percentage points on Tuesday. If you have a tracker mortgage with HSBC, your mortgage rate will decrease by 0.25% on tomorrow (February 7). The bank stated that its residential standard variable rate (SVR) mortgage products are currently under review. It added that any decision to reduce SVR rates will be promptly communicated to customers.