UK households having mortgage repayments reduced by £264

Mortgage brokers are confident lenders will trim the cost of their new fixed-rate deals over the next few weeks after the Bank of England base rate cut. For a tracker borrower paying 6.44%, a 0.25-percentage point cut to 6.19% would knock £22 a month off a £150,000 repayment mortgage with 20 years remaining, taking the monthly payment down from £1,113 to £1,091.

The average SVR now is 7.95%, according to the financial data provider Moneyfacts, so if the full cut is passed on to someone on that rate, that would mean monthly repayments for the above mortgage example will drop by £23 – from £1,250 to £1,227.

A £22 saving across a year would be £264, while a £23 cut would be £276. Mojo Mortgages' John Fraser-Tucker said: “We understand that navigating the mortgage market can be overwhelming, especially in light of recent economic changes. That's why we're here to support both existing homeowners and those aspiring to buy their first home.

READ MORE State pensioners warned 'leave your oven doors open after cooking'

“At Mojo Mortgages, we're committed to making the process as smooth and transparent as possible. We have access to over 70 lenders, including high-street banks, building societies, and specialist providers. This wide range allows us to find options that truly fit each individual's unique situation.

“Our team recognises that every mortgage journey is personal and often filled with questions and concerns. That's why we combine our extensive market access with a personalised, data-driven approach. We're here to listen, understand your specific needs, and guide you through each step of the process.

“So whether you're a first-time buyer feeling uncertain about your options, or a homeowner looking to remortgage in this changing market, we're here to help you make informed decisions. Our goal is to be more than just a mortgage broker – we aim to be a trusted partner in one of life's most significant financial decisions."

Darryl Dhoffer, Managing Director at The Mortgage Geezer commented: "The Bank of England has followed market expectations by reducing its base interest rate by 0.25% to 4.75% with a vote of 8-1 in favour of a 0.25% cut. This decision, in line with the global trend of central banks easing monetary policy, is unlikely to cause significant market volatility. The move comes amid economic uncertainty and easing inflationary pressures. It's seen as a proactive measure to stimulate growth and prevent potential deflation. However, the muted market response suggests that investors had already anticipated this rate cut. Market participants will be closely monitoring the BoE's forward guidance for insights into future interest rate decisions. While the rate cut may provide some relief to borrowers, its impact on reigniting economic growth remains uncertain."

Riz Malik, Independent Financial Adviser at R3 Wealth commented: "It is likely that this is the final base rate cut of 2024. Before the Budget, the expectation was there could be another one in December but Rachel Reeves appears to have taken that off the table. The Bank of England will be keeping a key eye on developments across the pond but rate cuts are expected to continue into 2025."