What It Means for Mortgages, Buyers and Homeowners in Harrogate
What’s happened?
The Bank of England has today cut the base interest rate to 3.75%, marking its fourth reduction in 2025 and the lowest rate in nearly three years. The move follows a sharper-than-expected fall in inflation to 3.2% and growing economic uncertainty heading into 2026.
While this cut was widely predicted, it’s still a significant moment for homeowners, buyers, and mortgage holders across Harrogate and North Yorkshire.
How does this affect mortgage rates?
We’ve already seen lenders begin reducing their mortgage products in anticipation of today’s decision. Most notably:
•2-year fixed rates are now cheaper than 5-year deals
•Tracker and variable rate mortgage holders may see lower monthly payments immediately
If your mortgage is due to end in the next 6–12 months, this cut could influence what lenders offer you, especially as competition between banks is expected to heat up in early 2026.
Insight from our in-house mortgage broker
We asked Andrew Milnes, our in-house mortgage adviser, for his take:
“Whilst the latest cut in the Bank of England base rate was widely predicted, it’s still seen as welcome news to many homeowners.
For those looking to purchase during 2026, expect a flurry of lender activity as they fight to feature on the best-buy tables. For the 800,000+ homeowners whose fixed rate deals end next year, many of which were set below 3%, this is a timely development.
We’re expecting high competition in the lending market in Q1, and my hope is that the innovation we saw in 2025 continues.”
What about affordability?
Lenders use what’s known as a “stress test” to check if borrowers could still afford repayments if rates were to rise again. These calculations are based on the lender’s Standard Variable Rate (SVR), plus a margin.
If SVRs begin to fall in response to the base rate cut, mortgage affordability could improve slightly, a helpful boost for first-time buyers and movers in the Harrogate area.
What does this mean if I’m thinking of buying or remortgaging?
This news is worth acting on, especially if:
•You’re due to remortgage in 2026
•You’re considering buying a property in the next 6–12 months
•You’re unsure how this affects your affordability or borrowing power
Getting advice now could help you avoid rushed decisions later, especially with competition likely to increase early next year.
As Harrogate’s only fully comprehensive estate agency, we can help you understand where you stand and what your options are. Get in touch today 01423 501211.