The Bank of England has cut the base rate from 5.25% to 5%. This rate is used by the central bank to charge other banks and lenders when they borrow money, so the move will impact mortgage and savings rates.
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Bank of England cuts base rate to 5% – what does it mean for your mortgage and savings?
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Bank of England cuts base rate to 5% – what does it mean for your mortgage and savings?
MSE_Molly_G
Posts: 186 MSE Staff
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Comments
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If I keep up the 20-year mortgage period (which I won't), it'd be
... with the previous rate 5.44% = £221,820
... with the new rate 5.19% = £217,323
As I don't intend to wait 20 years, the difference would be very marginal (in the 100s range)I'm FTB, not an expert, all my comments are from personal experience and not a professional advice.MFWB 2026 #44.Mortgage debt start date = 11/2024 = 175k (5.19% interest rate, 20 year term)- Q4/2024 = 139.3k (5.19% -> 4.94%)
- Q1/2025 = 125.3k (4.94% -> 4.69%)
- Q2/2025 = 108.9K (4.69% -> 4.44%)
- Q3/2025 = 92.2k (4.44% -> 4.19%)
- Q4/2025 = 44k (4.19% -> 3.94%)
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With around of a third of fixed rate mortgage holders still paying less than 3%. Still a considerable shock to many on the horizon.0
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It only means something if you're on a tracker rate mortgage...or if you have excessive amounts of cash in variable rate savings.
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To my mortgage nothing as at the end of the current fixed rate term I will pay it off.
To my savings, well it depends how much the banks now decide to hollow out good savings rates for a very minor change to BOE base rate.
I am more concerned that this control is being applied in a manner that will lead only to further house price increases and we continue to screw our kids with the fallacy that HPI is good.0 -
Doubtful, the world has changed massively, Japan is even raising rates and that will have consequences for mortgage holders down the road, the "Ten Year Yield" is the thing to watch.BikingBud said:To my mortgage nothing as at the end of the current fixed rate term I will pay it off.
To my savings, well it depends how much the banks now decide to hollow out good savings rates for a very minor change to BOE base rate.
I am more concerned that this control is being applied in a manner that will lead only to further house price increases and we continue to screw our kids with the fallacy that HPI is good.
https://www.theguardian.com/business/article/2024/aug/02/dont-be-fooled-by-the-interest-rate-cut-higher-rates-are-here-to-stay
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