20 December 2023, 21:50 | Updated: 20 December 2023, 21:51
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More than a million homeowners are set to benefit from plummeting mortgage rates following a large drop in inflation.
Inflation has fallen to 3.9%, a bigger than expected drop and a large fall from the previous figure of 4.6%, pushing down the cost of borrowing.
The cost of a five-year fixed-term mortgage has now fallen below four per cent for the first time in several months and even more drops are expected next year, experts say.
It comes amid mounting pressure on the Bank of England to consider cutting interest rates as inflation reaches its lowest level in two years.
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Analysts predict that interest rates, currently set by the BoE at 5.25%, could be cut as soon as February, dropping to around four percent by 2025.
Read More: Average two-year mortgage rate dips below 6% for first time in nearly six months
Mortgage rate cuts will benefit future homebuyers and 1.6 million homeowners planned to come off fixed-rate deals in 2024.
The majority of homeowners have had their fixed mortgage rates set below 2.5 percent.
Meanwhile, the Government could have a £15 billion boost as the cost of borrowing falls, giving Chancellor Jeremy Hunt more to work with in the Spring budget, The Times reports.
“When we can, we want to bring down the tax burden so that people keep more of the money that they earn,” Mr Hunt said today.
