This is the first reduction since the since 2020 and follows the recent reduction in inflation. This was a close call with many experts predicting they would wait until September.
In terms of mortgages, anyone on a variable rate mortgage, such as a tracker, will see their interest rate, and therefore mortgage payments, come down.
Many lenders have already been reducing fixed rates in recent weeks and although this base rate reduction doesn’t directly impact fixed rate deals, it can only be good news for mortgage rates in the near future.
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As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.