5 Mar

Rate cut 'could save first-time buyers £29 a month'

Rate cut 'could save first-time buyers £29 a month'

Over £29 could be trimmed off the cost of the average first-time buyer mortgage if the Bank of England's monetary policy committee votes to trim the base rate by 0.5 per cent today, it has been projected.

The Council of Mortgage Lenders (CML) has stated that in December 2008 the average mortgage for those taking the first step on the housing ladder was £100,145.

A 25-year repayment mortgage for £100,000 would see the monthly bill drop by £29.25 from £590.09 to £560.84, it calculated, while there would be a reduction of £14.71 on average for a 0.25 per cent cut.

Lloyds TSB said yesterday it will pass on any cut to its tracker and standard variable rate (SVR) customers, while Skipton Building Society pledged that its SVR product holders would also see any reduction applied to their repayments.

According to CML figures, 40 per cent of mortgage holders are on tracker or discounted variable rate mortgages, while just under ten per cent have SVR-based deals.
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