The Bank of England cut base rate from 4.25 per cent to 4 per cent. Our calculator lets you work out what a move up or down could cost you.
The base rate was cut by 0.25 percentage points by the Bank of England’s Monetary Policy Committee in August 2025. This was the fifth cut since rates began to fall a year ago from their current cycle peak of 5.25 per cent.
> What the Bank of England’s interest rate cut to 4% means for you
You can use our calculator to work out how much less you would pay on your mortgage if your lender cuts the rate you are paying. It can also show you the extra cost if interest rates rise.
The calculator lets you use your current mortgage rate and see how different levels of rate rises or falls would affect interest and monthly payments.
You can either use the amount base rate has changed by or your own figures, for example, check the effect of going from an old five-year fixed rate mortgage at 2 per cent to a new one at 4.5 per cent.
Enter a figure for the size of a rate rise, for example, 0.25, 0.50. or 0.75, or a negative value (eg -0.25) for a rate cut.
> Check the best live mortgage rates you could apply for with our mortgage finder
What is happening to interest rates
At its meeting in August 2025 the Bank of England’s Monetary Policy Committee was split, taking two rounds of voting to make the decision for the first time.
In the first round of voting, four members called for a cut to 4 per cent, four for a hold and one to cut by larger 0.5 percentage points. Member Alan Taylor voted for a bigger cut to 3.75 per cent, but then in a second vote to end the deadlock he changed his vote to favour a 4.25 per cent.
In the second round, five members voted for the cut and four to keep the rate at 4.25 per cent.
Today’s cut is the fifth since August 2024, with interest rates having fallen 1.25 percentage points from their 5.25 per cent peak.
The previous Bank of England decision, on 19 June, was a hold. The next decision is on 18 September and markets do not expect another immediate cut.
The cuts since the peak of this interest rate cycle follow a period of rapid rises, with 14 consecutive base rate hikes from December 2021.
The Bank of England’s base rate, officially known as Bank Rate, rose from 0.1 per cent in December 2021 to 5.25 per cent in August 2023. It stayed there until the first cut a year later.
Markets expect another two or three interest rate cuts in this cycle, with the key factor being what happens with inflation and the economy.
The Bank of England’s Monetary Policy Committee aims to keep inflation under control. It is made up of expert economists who vote on what the base rate should be.
The idea is that by raising base rate, it raises the cost of borrowing and that reduces demand for it from consumers, households and businesses, which slows the economy down.
Base rate vs mortgage rates
When the Bank of England changes the base rate some mortgage rates will move, but not all.
Fixed deals will remain at the same level until they finish, base rate trackers will move by the same amount as the Bank’s shift, and standard variable rates or other deals linked to them will move by an amount decided by the lender.
Fixed rate mortgages are far higher than they once were. In 2020, the best fie-year fixed rate mortgages were at about 1.3 per cent, currently they are just under 4 per cent.
Read our What next for mortgage rates? guide to get the latest news on what is happening with rates.
Latest interest rates and mortgages news
Read our regularly updated guides to find out more:
When will interest rates fall?
What next for mortgage rates and should you fix?
Our Mortgages & home section also features all our latest mortgage rates articles.
Savers are benefitting from higher rates – check the best savings rates in our independent tables.
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