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Brokers inundated with calls from confused borrowers after base rate cut

ended 08. August 2025

Following yesterday's Bank of England rate cut, brokers say they have been inundated with calls from borrowers currently applying for a mortgage, believing that the base rate reduction will instantly make the mortgages they were due to take out cheaper. Even many borrowers on fixed rates, brokers say, think their mortgage payments will benefit from the cut.

Jack Tutton, Director at Fareham-based SJ Mortgages, said: "We have been inundated with clients asking about the impact of the reduced base rate on their mortgage application, with most expecting their rate to be reduced instantly in line with the reduction. This, of course, isn't the case.

“The most recent cut to the base rate had been expected and priced into mortgage products for a while. The fact that the vote was a lot closer than many had expected has had the opposite effect with financial markets and we could start to see rates go the wrong way should this continue.”

Bob Singh, Founder at Uxbridge-based Chess Mortgages, said even borrowers on fixed rates often assume they will benefit from a cut: "A lot of borrowers believe their rates will improve after a Bank of England rate cut, even if they are on a fixed rate. They just see a headline like 'Bank cuts rates' and believe it will apply to them. Only tracker rates and variable rates benefit from a rate cut. The rest of us have to wait until our current fixed rates end and then it’s what swap rates are doing at that time that dictates the rates we'll get.

“Sonia SWAP rates are the main driver behind the pricing of fixed rates and they are a great indicator as to where the markets thinks rates will be in the future.”

Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, also said headlines can be confusing: “It's understandable why borrowers get confused when they see false headlines and then question their broker about the huge savings they are expecting”.

Shaun Sturgess, Director at Swansea-based Sturgess Mortgage Solutions, says financial education — or the lack of it — is a key contributor: “This is a conversation we have with clients on a daily basis, and it highlights a broader issue around financial education — something I firmly believe should be taught in schools. It’s surprisingly common for borrowers on fixed-rate mortgages to assume their payments will reduce following a Bank of England base rate cut. Unfortunately, this misunderstanding is often fuelled by misleading media headlines, which fail to distinguish between fixed, variable and tracker products. The result is confusion and, in some cases, disappointment.”

Rob Mansfield, Independent Financial Advisor at Rootes Wealth Management, says “it's really common for the financial services profession to assume that clients know much more than they actually do. Finance is not a glamorous subject and numbers generally leave people cold. I've made education a key part of my approach, not so they understand all the intricacies but to build trust and confidence in an area that turns people off”.

Samuel Mather-Holgate, Independent Financial Adviser at Swindon-based Mather and Murray Financial, added: “Most people with mortgages have a good understanding of what does or doesn’t affect their rate. It’s the largest lending and biggest asset they will ever own so most people want to invest some time in understanding how the payments work.

"That said, it’s also down to the adviser to explain the options and which product they end up taking out. The main question clients have is whether it’s worth keeping their fixed rate or if there are better details out there, factoring in any early repayment charges.”

6 responses from the Newspage community

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Jack Tutton
Director at SJ Mortgages
We have been inundated with clients asking about the impact of the reduced base rate on their mortgage application, with most expecting their rate to be reduced instantly in line with the reduction. This, of course, isn't the case. This all stems from the headlines used in the media without the explanation of the fact that fixed rate are not directly linked to the base rate itself. The most recent cut to the base rate had been expected and priced into mortgage products for a while. The fact that the vote was a lot closer than many had expected has had the opposite effect with financial markets and we could start to see rates go the wrong way should this continue.
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Bob Singh
Founder at Chess Mortgages
A lot of borrowers believe their rates will improve after a Bank of England rate cut, even if they are on a fixed rate. They just see a headline like 'Bank cuts rates' and believe it will apply to them. Only tracker rates and variable rates benefit from a rate cut. The rest of us have to wait until our current fixed rates end and then it’s what swap rates are doing at that time that dictates the rates we'll get. The reduction of base rate tends to heighten people’s interest in economics and everyone talks as if they went to LSE. The fact is many people do not fully grasp how mortgage rates are set. One thing is certain it’s not the Bank of England base rate per se. Sonia SWAP rates (future rates) are the main driver behind the pricing or fixed rates and they are a great indicator as to where the markets thinks rates will be in the future. Lenders hedge their bets using complex financial instruments to minimise losses if rates move against them.
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Shaun Sturgess
Director at Sturgess Mortgage Solutions
This is a conversation we have with clients on a daily basis, and it highlights a broader issue around financial education — something I firmly believe should be taught in schools. It’s surprisingly common for borrowers on fixed-rate mortgages to assume their payments will reduce following a Bank of England base rate cut. Unfortunately, this misunderstanding is often fuelled by misleading media headlines, which fail to distinguish between fixed, variable and tracker products. The result is confusion and, in some cases, disappointment. It’s crucial that the media consult industry professionals when reporting on rate movements to provide accurate, practical context for consumers rather than generalised or sensational narratives.
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Justin Moy
Managing Director at EHF Mortgages
Unfortunately, both the national press and social media starlets stir the misinformation for the benefit of headlines, views, and clicks. This is exactly what happens when so-called credible news outlets don't feature knowledgeable industry experts; instead, they wheel out the same equity fund managers, estate agents, and economic experts with little combined experience of the mortgage market and how mortgage rates really work. For this reason alone, it's understandable why borrowers get confused when they see false headlines and then question their broker about the huge savings they are expecting.
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Samuel Mather-Holgate
Managing Director & IFA at Mather and Murray Financial
Most people with mortgages have a good understanding of what does or doesn’t affect their rate. It’s the largest lending and biggest asset they will ever own so most people want to invest some time in understanding how the payments work. That said, it’s also down to the adviser to explain the options and which product they end up taking out. The main question clients have is whether it’s worth keeping their fixed rate or if there are better details out there, factoring in any early repayment charges.
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Editor
Rob Mansfield
Independent Financial Advisor at Rootes Wealth Management
I think it's really common for the financial services profession to assume that clients know much more than they actually do. Finance is not a glamorous subject and numbers generally leave people cold. I've made education a key part of my approach, not so they understand all the intricacies but to build trust and confidence in an area that turns people off.