8 Jan

Tracker customers 'could save £45' if rate cut

Tracker customers 'could save £45' if rate cut

A base rate cut today could result in tracker mortgage customers being £45 a month better off, it has been projected.

The Council of Mortgage Lenders (CML) has calculated that holders of such deals worth £150,000 over a 25-year duration could save £45.83 a month if the reduction were to be by 0.5 per cent.

A 0.25 per cent trimming would reduce payments by £23.04.

Tracker or discounted variable mortgages make up 40 per cent of current deals, while in October 2008 35 per cent of mortgages were trackers, the CML noted.

While many could benefit from a rate reduction, the body noted that some deals have a minimum rate, which would prevent the full cut being passed on.

A mortgage of £150,000 is the closest figure to the current average house price according to Nationwide, which put the level at £153,048 in December.
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