More relief for households as mortgage pressures ease with latest base rate cut

THE average home owner on a tracker mortgage will see their monthly repayments fall by nearly £29, after last week's quarter-point snip to the Bank of England base rate.

- by VICKY SHAW AND ANNA WISE

UK Finance said home owners on tracker deals will typically see their monthly repayments reduce by £28.97, based on balances outstanding. This could add up to a saving of nearly £350 over the course of a year.

People on a standard variable rate (SVR) mortgage could see their monthly payments fall by £13.87, assuming their lender passes on the base rate cut in full, which could add up to a saving of nearly £170 over a year.

Mortgage holders may end up on an SVR when their initial deal ends and the rate is set by individual lenders.

The Bank of England cut the base rate to 4.25% last Thursday, from 4.5%, following a slowdown in inflation in recent months.

Many lenders have been chopping rates in recent weeks, including several offering deals at sub 4% levels.

Around 85% of outstanding mortgages are fixed rates - and home owners on these deals will not see their rates change until they move onto a new deal.