The half-point cut in interest rates will immediately benefit borrowers on mortgages that track the Bank of England base rate.
“Homeowners on a 25-year £100,000 repayment mortgage at 5.75% will see an instant £31 reduction in monthly repayments to £599.
David Kuo, Head of Personal Finance at money website Fool.co.uk, says: “We welcome the Bank of England’s timely cut in interest rates to help restore confidence in financial markets. The Monetary Policy Committee has rightly put its concerns over inflation on hold as it focuses on more important matters.
“However, we urge homeowners on tracker mortgages not to reduce their monthly repayments. Instead, by making regular monthly overpayments, borrowers will be steadily chipping away at the outstanding loan.
“Unlike the Government which needs to take one giant leap to sort out its financial problems, homeowners can do it by taking a number of little steps. By overpaying as little as £31 a month, borrowers can be mortgage free in 22 years and 8 months rather than 25 years.”
