The Bank of England’s recent decision to reduce interest rates to 4.75% from 5% reflects a strategic effort to support the economy, particularly borrowers facing high repayment costs in a challenging economic environment. This rate cut, the second in 2023, follows a previous reduction of 0.25 percentage points in August—the first since 2020—which indicates the Bank’s shift toward a more accommodative monetary policy.
The Bank of England’s recent 0.25% interest rate cut could offer meaningful, if modest, relief to UK homeowners in 2024, particularly those with variable or tracker mortgages. These mortgages, which directly follow the central bank’s interest rate, will see reduced monthly payments, easing financial pressure for borrowers amid ongoing economic uncertainty.
For homeowners on a variable rate with an average mortgage size of £200,000, this rate cut could mean monthly savings of £25 to £30—helpful for households managing tight budgets. However, for those with fixed-rate mortgages, there won’t be an immediate impact since their rates are locked until renewal. Yet, as fixed-rate deals end, the current rate cut could lead to more favourable options in the lending market, potentially reducing costs for those seeking new mortgages or refinancing.
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Your home may be repossessed if you do not keep up with your repayments.
