Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner. Facebook Messenger An icon of the facebook messenger app logo. Facebook An icon of a facebook f logo. Facebook Messenger An icon of the Twitter app logo. LinkedIn An icon of the LinkedIn logo. WhatsApp Messenger An icon of the Whatsapp messenger app logo. Email An icon of an mail envelope. Copy link A decentered black square over a white square.

What does the interest rate cut mean for you? All your questions answered

(Getty Images)
(Getty Images)

THE Bank of England’s base rate has been snipped to 0.25% – so what will this extra chop mean for you?

For savers, it’s likely to mean the returns on their cash pots dwindle further, but borrowers may see their monthly repayments become a bit cheaper.

Here are some more answers to general questions you might have about the changes:

Will my mortgage rate go down?

This depends on what type of deal you have. More than 1.5 million home loans are bank rate trackers. In general, the rates on these deals track the movements of the base rate, plus a certain percentage margin specified by the lender.

Another type of variable rate mortgage is the standard variable rate. Homeowners often end up on these rates once the introductory period on their mortgage comes to an end.

These rates will not necessarily simply follow the base rate, as lenders take several factors into account when setting mortgage rates.

 

I’m on a fixed-rate mortgage deal that will not change with the base rate. Should I be kicking myself for not taking out a tracker?

Mortgage experts have pointed out that, thanks to several mortgage price wars, many fixed-rate deals have already hit record lows. So the chances are you may well be on a good deal in any case.

 

What will happen to savings rates?

Just as providers have been passing on the rate cut into mortgages, many have also been passing it on to their savings accounts – spelling further bad news for savers.

Figures from financial website Moneyfacts show that even before the base rate was cut, the average “no notice” ISA on the market paid just 0.95%.

 

I’m planning to get on the housing ladder. Will the situation get easier for me?

First-time buyers may find mortgage rates get slightly more attractive. With the uncertainty of the economy following the Brexit vote also having an impact on the housing market, it could also be a good time to bag a property, while other buyers are pausing for thought.

But, on the flipside, aspiring homeowners may have to save harder for longer as low returns on savings could make the job of building a deposit even trickier.

 

How will pensioners be affected?

While the rate cut could make life tougher for those relying on their savings as an income, it could also pose problems for those approaching retirement.

When people retire, they may choose to buy an annuity with their pension pot, which gives them a guaranteed retirement income. But experts have warned there is likely to be an extra downward pressure on annuity rates, which have already fallen to record lows.


READ MORE

Money worries are putting couples off parenthood, says report

Major banks ‘charging more to borrow money than payday lenders’