Base rate cut ‘can help tracker customers become debt free’

The interest rate cut implemented by the Bank of England will bring “exclamations of joy” from people on tracker mortgages, it has been claimed.

Ray Boulger of mortgage advice firm John Charcol said the move means that many borrowers will be paying “next to nothing” on their home loans, which may have considerable benefits for their debt management.

Those on interest-only deals will have seen 90 per cent “wiped off” their monthly repayments in recent months, he noted, adding that people on standard variable rates may also have benefited from the falling base rate.

Mr Boulger advised that if homeowners maintained the amount of money they have been paying back at September levels, they could “shave” ten years off the terms of their mortgages, something that can help them become debt free.

“My advice to these borrowers would be to use the current low interest rate environment and the consequent savings very wisely,” he remarked.

Yesterday (March 5th), a 0.5 per cent base rate reduction was unveiled by the Bank of England’s monetary policy committee.

By Jamie Price