Bank base rate could be reduced even further from its historic low this November.
According to the economic consultant, Capital Economics, the Bank of England could reduce interest rates this November, down to 0.25%.
A cut to base rate would potentially occur if the Funding for Lending Scheme is deemed a failure. The scheme was launched earlier this month by the Government in a bid to get banks and building societies lending to UK households and non-financial companies.
Any such reduction would mean homeowners on tracker rate mortgages would see their monthly repayments reduce considerably.
The average two year tracker rate is 3.80%. Based on this rate a borrower with a £150,000 mortgage currently pays £775.28 per month. If interest rates were slashed by 0.25%, the average rate would fall to 3.55%, resulting in a much lower monthly repayment of £754.96.
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