The Bank of England cuts the UK base rate back to record low

What does this mean for the mortgage market?

The Bank of England this morning announced that its Monetary Policy Committee (MPC) had voted unanimously to reduce the Bank Rate by 50 basis points to 0.25% - back to the lowest level in history - citing the spread of Covid-19 and the resulting volatility in financial markets.

Meanwhile, a number of major high-street banks have announced support for customers affected by Covid-19, including mortgage payment holidays. Banks can also offer temporary credit limit increases and fees waived on missed payments.

Today’s decision is likely to mean that anybody on a tracker mortgage will see an immediate and significant cut in their mortgage costs. It will also in due course likely affect the pricing of fixed-rate mortgages.

Mortgage market activity is currently at a four-year high. Lenders, many of whom are engaged in a rate war while competing for market share, have increased the number of mortgage products available to customers by 10% in a year.

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