Homeowners with tracker mortgages could save £45 a month if the Bank of England announces a large cut in the base rate today, the Council of Mortgage Lenders has claimed.
According to the body, lenders who pass on a 0.5 per cent cut would save customers with a £150,000 tracker mortgage £45.83 a month, while a 0.25 per cent reduction would see them £23.04 better off.
Borrowers who have a tracker mortgage and are currently struggling with their debt management may welcome the CML’s prediction.
However, the body also warned that some banks may choose to not pass on the cut, as their tracker mortgages could carry floor rates, meaning interest on them cannot fall past a set figure.
The Centre for Economics and Business Research recently urged the Bank to make a further base rate cut to help boost the economy.
A decision from the Monetary Policy Committee is expected at noon today.
By Tom Musk