Borrowers paying £200 less a month

Figures from the Bank of England revealed that more than 25% of UK mortgage borrowers are now paying £200 less a month for their mortgage than they were last year.

Thanks to the Bank cutting Base Rate to a historic low of 0.5%, and mortgage lenders starting to reduce the rates they charge on many of their deals, more than half of the borrowers surveyed are paying £100 a month less than they were at the end of 2008.

On average, mortgage borrowers are now paying at least £130 less because of decreasing interest rates.

The Bank released its report as it announced last week that it is to keep the Base rate on hold at 0.5% for the ninth consecutive month, and that it is continuing with its £200 billion asset purchase programme, known as ‘quantitative easing’.

It claims that these policies have helped significantly reduce the impact of the recession on UK consumers.

Drew Wotherspoon of mortgage broker John Charcol, said:

“The raft of fixed rate reductions being made across the mortgage market this week are undoubtedly going to be a welcome Christmas present for anyone who has been holding out for a fixed rate deal.

“It should provide some welcome Christmas cheer for those first-time buyers who need the security of a fixed rate, as well as for those borrowers who have been sitting on their lender’s standard variable rate, waiting for the right deal to lock into. Despite these cuts however, tracker mortgages are still looking more attractive overall.”