7 November 2024
The Bank of England’s base rate has been reduced today to 4.75% from 5%. This is only the second rate cut since the beginning of 2020.
Out of 9 members of the Monetary Policy Committee, 8 voted in favour of lowering the base rate by 0.25%, while one member voted to keep it at 5%.
Mortgage holders with tracker rate products can expect a decrease in their effective interest rate and monthly payments in the near future.
However, a reduction in the Bank of England’s base rate does not necessarily mean an immediate decrease in the cost of other mortgage deals (e.g., fixed-rate mortgages), as lenders take into account various factors when pricing their products, including:
- interest rates used for interbank or inter-institutional lending (swap rates),
- market conditions,
- funding costs.
