November 7th, 2024
Today, the Bank of England (BoE) announced a reduction in the base interest rate to 4.75%, down from 5.0%. This move, anticipated by some economists, reflects efforts to provide relief amid challenging economic conditions.
For self-employed professionals, contractors, and freelancers, this change presents a timely opportunity to explore more competitive mortgage options.
This comes in line with a recent spate of reductions following years of rises
Historical Context of Base Rate Changes
To provide perspective, here’s a summary of the Bank of England’s base rate changes since 2020:
| Date | Base Rate (%) |
| March 2020 | 0.10 |
| December 2021 | 0.25 |
| February 2022 | 0.50 |
| March 2022 | 0.75 |
| May 2022 | 1.00 |
| June 2022 | 1.25 |
| August 2022 | 1.75 |
| September 2022 | 2.25 |
| November 2022 | 3.00 |
| December 2022 | 3.50 |
| February 2023 | 4.00 |
| March 2023 | 4.25 |
| May 2023 | 4.50 |
| June 2023 | 4.75 |
| August 2023 | 5.00 |
| November 2024 | 4.75 |
Source: Bank of England
What the Rate Cut Means for Self-Employed Mortgages
At CMME Mortgages, we understand that independent professionals have specific needs when it comes to securing a mortgage. With the reduction to 4.75%, those on variable or tracker mortgages may see a decrease in their monthly repayments, easing some financial pressure.
For those looking to take out a new mortgage or considering refinancing, this change opens up the possibility of accessing lower rates or more favourable terms, allowing you to maximise the value of your hard-earned income.
If you’re on a fixed-rate mortgage, the impact of this cut will be less immediate, but it may signal a trend towards more competitive offers in the near future as lenders adjust to the new rate. Reviewing your mortgage now could reveal opportunities to secure better rates that align with your financial goals and provide added security.
Isabelle Coeshott, Mortgage Consultant at CMME, commented the following:
Why the Bank of England Made This Decision
The BoE’s decision to reduce the rate to 4.75% reflects a balancing act in economic policy: supporting economic growth while keeping inflation under control. With signs that inflation is beginning to moderate, this move is intended to stimulate the economy while still maintaining long-term stability.
For self-employed professionals, this policy shift could create a more favourable financial environment, both for those currently holding mortgages and those looking to enter the property market.
Key Takeaways for Contractors, Freelancers, and Self-Employed Professionals
As a self-employed professional, you may have experienced challenges navigating a mortgage market traditionally designed for PAYE employees. However, today’s rate cut is a reminder that the market is evolving, with more lenders offering tailored solutions for professionals like you. Now could be an ideal time to:
1. Review Your Current Mortgage: With a base rate reduction, your lender may offer more competitive rates, especially if you’re on a tracker mortgage. Even for fixed-rate holders, a conversation with a mortgage adviser can reveal long-term options.
2. Consider Your Financing Needs for Future Property Investments: If you’re considering property investment, now could be the right time to explore options. Reduced rates may help lower initial borrowing costs, giving you greater flexibility to make property investments that suit your business objectives.
3. Plan for Potential Savings: Those with variable-rate mortgages may see an immediate drop in monthly repayments, potentially creating room for savings or reinvestment in your business. A small reduction in your rate can make a meaningful difference, particularly for those balancing both business and personal finances.
CMME Mortgages specialises in supporting self-employed professionals and contractors. Our advisers understand the complexities of income for contractors and freelancers, and we’re here to help you make sense of what today’s base rate reduction means for your mortgage. Whether you’re planning a move, considering refinancing, or simply want to discuss how the base rate change may impact you, our team is ready to help.
Stay Informed and Make the Most of Today’s Opportunities
The economic landscape is ever-changing, and further rate changes may occur as the Bank of England adapts to evolving conditions.
Regardless of base rate changes, autumn budget announcements affecting your finances, or whatever else this evolving landscape throws at you, CMME will fight your corner to help you secure the best possible deal regardless of your circumstances.
To explore your options or review your current mortgage in light of this latest change, contact our team at CMME Mortgages. We’re here to support you in securing a mortgage that truly suits your professional lifestyle.