The Bank of England has reduced interest rates from 4.5% to 4.25%, marking its fourth cut since August amidst global economic uncertainty. This decision, made by a narrow vote among the Monetary Policy Committee, is favorable for homeowners with variable-rate and tracker mortgages, who can expect immediate savings on their monthly payments. However, fixed-rate mortgage holders may not see immediate benefits as rates have been falling for some time. The implications of this decision are significant for mortgage borrowers and savers alike, creating varying impacts across the financial landscape.
"Today's rate cut was widely expected and had already been priced into fixed deals," said Martin Temple of Leeds Building Society.
The rate cut is good news for the 1.13 million homeowners on variable-rate (SVR) mortgages and the 591,000 on tracker deals.
UK Finance estimates the average tracker mortgage holder will save around £29 a month, while those on SVRs could save about £14.
Borrowers whose deals end within the next four to six months can lock in a rate now and switch later if cheaper rates become available.
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