MORTGAGE lenders have raced to slash their rates after the Bank of England cut interest rates to 4.75% this afternoon.
This move will immediately benefit thousands of mortgage customers with Halifax, Lloyds Bank, and Metro Bank, who will see a decrease in their repayment amounts.
Plus, customers with Barclays, Coventry Building Society, Leeds Building Society, Nationwide, NatWest, Skipton, and Virgin Money can also expect changes in the coming days and weeks.
It comes after several lenders cut their fixed mortgage rates in anticipation of interest rates falling for the second time in four years.
For example, Santander and Accord mortgage cut their fixed-rates by up to 0.36%.
Earlier this afternoon, the Bank of England‘s (BoE) Monetary Policy Committee (MPC) cut the base rate by 0.25 percentage points from 5% to 4.75%.
Lenders use the base rate to set their interest rates for savings and borrowing costs, including mortgages.
This reduction means millions of mortgage holders will see their bills decrease.
The central bank’s decision comes after the Office for National Statistics (ONS) reported that inflation stood at 1.7% in September, well below the BoE’s 2% target.
Interest rates had previously risen from historic lows of 0.1% in December 2021, peaking at 5.25% in July 2023, as part of efforts to reduce inflation to the Bank’s target.
A fall in interest rates usually leads to a decrease in mortgage interest rates.
However, the reduction you’ll see depends on the type of home loan you have.
Those on tracker and standard variable rate (SVR) mortgages typically see an immediate change in payments.
A tracker mortgage is a type of variable mortgage where your monthly payments rise and fall in line with the Bank of England base rate.
With a tracker mortgage, you’ll usually pay the base rate plus an additional percentage in interest each month.
A standard variable rate mortgage is what you revert to once any initial mortgage term ends.
This rate will change in line with the base rate and is usually higher than any initial introductory rate.
There are currently 643,000 customers on tracker mortgages and 624,000 on SVRs.
TotallyMoney states that today’s 0.25% rate cut will immediately save homeowners £32 a month or £382 a year on the average tracker mortgage.
Those on fixed-rate mortgages won’t see any changes until their deals end and they take out a new one.
Even if your lender has cut rates, the date your repayments actually change will depend on when your payment is due.
We’ve listed all the lenders cutting mortgage rates below.
All of Barclays’ UK residential and buy-to-let mortgage products are fixed or otherwise track the BoE base rate.
Therefore, whenever the base rate goes up or down, customers on tracker rates will see their interest rate change accordingly.
If you’ve got a tracker or variable rate mortgage with Barclays, your mortgage rate will fall by 0.25% on December 1.
For new customers, the rates will be amended from November 8.
The lender’s fixed-rate mortgages remain unchanged.
Following the Bank of England Base Rate change, all Coventry Building Society mortgages that track the Base Rate will automatically decrease by 0.25%.
This will take effect from 1 December.
The building society said that all the rates offered on its standard variable mortgages are currently under review.
The lender’s fixed-rate mortgages remain unchanged.
Where a customer has a mortgage that tracks the bank base rate, their rate will be cut with immediate effect in line with their terms and conditions.
The Halifax Homeowner Variable Rate (HVR), currently at 8.49%, will decrease by 25 basis points to 8.24%.
The Halifax Standard Variable Rate (SVR), currently at 8.49%, will also decrease by 25 basis points to 8.24%.
The changes to the SVR rates above will come into effect for existing customer accounts from December 1.
The lender’s fixed-rate mortgages remain unchanged.
Where a customer has a mortgage that tracks the bank base rate, their rate will be cut with immediate effect in line with their terms and conditions.
The Lloyds Bank Homeowner Variable Rate, currently at 8.49% will decrease by 25 basis points to 8.24%.
The Lloyds Standard Variable Rate, currently at 7.00%, will decrease by 25 basis points to 6.75%.
The changes to the SVR rates above will come into effect for existing customer accounts from December 1.
The lender’s fixed-rate mortgages remain unchanged.
A Metro Bank spokesperson said: “In line with the Bank of England decreasing the base rate from 5% to 4.75% we’re updating all retail mortgage products that track the Bank of England base rate.
“We are confident that our wide range of mortgages continue to meet our customers’ needs but we encourage anyone who may be worried about their payments to get in touch to discuss their options.”
These changes have come into effect immediately and will be reflected in your next monthly payment on impacted accounts.
Metro Bank said it would formally confirm the changes on its website, and all impacted customers would receive communications about them over the next couple of days.
The lender’s fixed-rate mortgages remain unchanged.
Mortgage customers on Nationwide’s standard mortgage rate (SMR) will decrease by 25 basis points.
The new SMR of 7.49% will come into effect on December 1.
Rates on tracker mortgages held by existing customers automatically decrease when the Bank rate is cut, so these will decrease to reflect the Bank rate change from December 1.
The lender’s fixed-rate mortgages remain unchanged.
A NatWest spokesperson said: “Following the Bank of England base rate cut, we will be passing on the rate cut in full to our customers on a standard variable rate (SVR) mortgage.
“The SVR will be reduced from 7.99% to 7.74%, effective from December 1.
“SVR customers may also be able to save money by switching to one of our fixed-rate mortgages.”
The lender’s fixed-rate mortgages remain unchanged.
Customers who have mortgages which track the Bank of England base rate will see their account interest rate change in line with their terms and conditions.
For most base rate tracker products, rates will be decreased no later than 14 days from today (November 7).
Skipton’s current, on sale base rate tracker mortgage products will continue to be available until 10pm on Sunday, November 10.
The new rates reflecting the 0.25% Bank of England base rate cut will be available from Monday, November 11.
The lender’s fixed-rate mortgages remain unchanged.
Virgin Money is writing to customers who have a mortgage directly linked to the Bank of England base rate to confirm their new monthly mortgage payment and interest rate.
Any new rates set will take effect from January 1.
The lender’s fixed-rate mortgages remain unchanged.
IF you're looking for a traditional type of mortgage, getting the best rates depends entirely on what's available at any given time.
There are several ways to land the best deal.
Usually the larger the deposit you have the lower the rate you can get.
If you’re remortgaging and your loan-to-value ratio (LTV) has changed, you’ll get access to better rates than before.
Your LTV will go down if your outstanding mortgage is lower and/or your home’s value is higher.
A change to your credit score or a better salary could also help you access better rates.
And if you’re nearing the end of a fixed deal soon it’s worth looking for new deals now.
You can lock in current deals sometimes up to six months before your current deal ends.
Leaving a fixed deal early will usually come with an early exit fee, so you want to avoid this extra cost.
But depending on the cost and how much you could save by switching versus sticking, it could be worth paying to leave the deal – but compare the costs first.
To find the best deal use a mortgage comparison tool to see what’s available.
You can also go to a mortgage broker who can compare a much larger range of deals for you.
Some will charge an extra fee but there are plenty who give advice for free and get paid only on commission from the lender.
You’ll also need to factor in fees for the mortgage, though some have no fees at all.
You can add the fee – sometimes more than £1,000 – to the cost of the mortgage, but be aware that means you’ll pay interest on it and so will cost more in the long term.
You can use a mortgage calculator to see how much you could borrow.
Remember you’ll have to pass the lender’s strict eligibility criteria too, which will include affordability checks and looking at your credit file.
You may also need to provide documents such as utility bills, proof of benefits, your last three month’s payslips, passports and bank statements.
