7 November: US Federal Reserve Also Makes Quarter-Point Cut
Mortgage deals could be cheaper in the coming days and weeks following the Bank of England’s decision to cut its Bank Rate from 5% to 4.75%, writes Kevin Pratt.
The cut was expected because of the steep fall in the rate of inflation in September, from 2.2% to 1.7%. The Bank uses higher lending rates to sap demand from the economy in a bid to slow down rising prices.
Banks and building societies may now be thinking about trimming the cost of new loans for mortgage borrowers and those remortgaging their property to reflect the lower cost of institutional borrowing.
Existing fixed-rate deals will remain at their current prices while loans linked to the Bank Rate – known as trackers – will fall with immediate effect.
Lenders’ variable rate deals are also likely to fall, but the timing and size of reductions will vary by lender.
Borrowers tempted to remortgage away from their current loan to a cheaper offer should take into account the clutch of charges and fees they may encounter, including a possible early repayment charge, arrangement and legal fees, and the cost of a property valuation.
While today’s move by the Bank of England was not a surprise, forecasts about further cuts in December and in 2025 have been thrown into question by government borrowing and spending measures announced in last month’s Budget and Donald Trump’s victory in Tuesday’s US…
