News Update – Bank of England Base Rate Announcement

The Bank of England’s Monetary Policy Committee has today announced that Bank Base Rate has been cut by 0.25% to now stand at 5.00%

In a close decision, the Committee voted 5-4 in favour of a cut, with the doves winning through in saying the time is right for a cut.

Andrew Montlake, MD of Coreco mortgage brokers commented, “After much speculation the Bank of England has finally heeded the calls of existing and prospective borrowers for a much-needed interest rate cut.

“Whilst the market had already priced such a move in, sentiment is everything and this will prove to be a shot in the arm for the housing and mortgage markets.”

“Had it not moved the Bank of England would have been accused of being over-cautious and out of touch with the mood on the High Street, but this move shows that they can listen.

“Although mortgage rates have already been steadily dropping in anticipation of such a move, this will give more lenders confidence to improve their offerings, although borrowers should not expect huge downward spirals.

“Borrowers on a variable tracker rate will see their monthly payments reduce by £36.64 for those with a typical 25 year repayment mortgage of £250,000, or £52.08 for those on an interest only basis.

“Further reductions will come but these will be very slow and steady as the Bank continues its cautious approach. Nevertheless, this is a day of celebration as a corner has most definitely been turned”.