Millions of households are set to feel slightly less pressure from higher mortgage costs after the Bank of England began to cut interest rates from a 16-year high.
About a fifth of borrowers, equivalent to around 1.7 million households, are on floating rate deals that are tied to movements in the UK’s base rate, the Bank’s financial policy committee estimated on Wednesday.
It said that these homeowners will have already begun to benefit from lower costs after the Bank reduced its benchmark rate from 5.25 per cent to 5 per cent in August, which is estimated to have trimmed almost £120 from annual payments made by borrowers on variable rates.
Around a third of mortgagors, or some 3 million borrowers, who are presently mainly paying