Mortgage deals 'likely to fall' after Bank cut interest rates

THE decision to reduce interest rates will encourage major banks to cut mortgage rates, analysts have predicted.

- By Amber Murray

Lower rates will be a major affordability boost for the housing market, which continues to price out young buyers unable to rely on financial gifts or savings.

RBC analyst Anthony Codling said: "If homebuyers can borrow more, they most likely will."

Codling estimated that a 1% cut in mortgage rates has a similar impact on affordability as a 10% fall in house prices.

He added: "Mortgage rates may be one of the few beneficiaries of uncertainty on the outlook for global trade."