Record low interest rates have led to many borrowers seeing their mortgage payments drop significantly over the last year, according to new research from the Bank of England.
Its latest Quarterly Bulletin revealed 45% of mortgage borrowers were on a continuing variable rate deal, of which almost a quarter had reported a fall in their monthly mortgage payments of more than £200.
Around half had enjoyed a drop in their payments in excess of £100, while the average fall reported was £130.
Of the 14% of borrowers who had a mortgage deal that had expired during the previous twelve months, the majority were found to have been able to refinance onto a new deal with lower monthly payments.
However, the average fall of £39 was considerably smaller than for mortgagors on continuing variable rate deals.
A fifth even reported a rise in monthly mortgage payments, believed to be a result of falling house prices increasing their loan to value ratios, forcing them to refinance onto a more expensive mortgage.
With lender's standard variable rates (SVR) an attractive alternative to refinancing onto a new deal for many households, almost a quarter moved to the SVR in 2009 compared with only 7% in 2008.
All borrowers who moved to the SVR saw their payments drop or remain broadly unchanged, with an average fall of £109, as opposed to the £89 rise reported in 2008.
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