UK banking customers could save up to £347 per year following the Bank of England's decision to cut its base rate from five per cent to 4.75 per cent.
The move will immediately benefit thousands of mortgage customers, with major lenders including Halifax, Lloyds Bank, and Metro Bank already implementing rate reductions.
Customers with Barclays, Coventry Building Society, Nationwide, NatWest, and Skipton will see changes implemented in the coming days and weeks.
The base rate reduction to 4.75 per cent marks the second cut since the summer. According to UK Finance, homeowners with tracker mortgages will see their monthly payments decrease by £28.98 - £347 a year, while those on standard variable rate (SVR) mortgages can expect monthly savings of £17.17 - £206 a year.
Experts believe that due to Government borrowing announced in the Budget, the Bank of England could slow down the rate of any base rate cuts.
Paul Dales, chief UK economist for research firm Capital Economics, said: "We no longer think rates will be cut quicker in the second half of 2025 and we now think rates will fall only as far as 3.5 per cent in early 2026 rather than to three per cent. Note this change is driven by the UK Budget and not the US election."
Coventry Building Society mortgages tracking the base rate will automatically decrease by 0.25 per cent, effective from December 1.
COVENTRY BUILDING SOCIETYSusannah Streeter, head of money and markets at financial service firm Hargreaves Lansdown, added: "If the dollar continues to strengthen, it could increase the costs of goods imported into the UK, adding to inflationary pressures.
"This means that the Bank is likely to go a bit slower than previously expected in bringing in rate cuts. A move below four per cent by the end of next year looks more unlikely, but a lot can change between now and then."
With experts predicting rate cuts all through next year, those on tracker mortgages will continue to see their mortgage costs fall, only increasing their savings.
Around 629,000 homeowner mortgages are currently on tracker rates, which automatically follow the Bank of England base rate movements.
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A further 693,000 mortgages are on SVR deals, which borrowers typically move onto after their initial mortgage deal ends. SVR rates can be changed by lenders at their discretion, though changes usually coincide with base rate adjustments.
SVRs are typically more expensive than fixed and tracker deals, with current rates ranging between seven and eight per cent.
The majority of UK mortgages - approximately 6.8 million - are on fixed-rate deals, which will see no immediate change in monthly payments.
Metro Bank has already implemented the changes, with a spokesperson stating: "We're updating all retail mortgage products that track the Bank of England base rate."
Halifax customers on tracker mortgages will see immediate rate cuts, with the Halifax Homeowner Variable Rate dropping from 8.49 per cent to 8.24 per cent.
Lloyds Bank's Homeowner Variable Rate will decrease from 8.49 per cent to 8.24 per cent, while their Standard Variable Rate falls from seven per cent to 6.75 per cent. All changes to Halifax and Lloyds' SVR rates will take effect for existing customers from December 1.
Barclays customers with tracker or variable rate mortgages will see their rates reduced by 0.25 per cent from December 1, with new customer rates changing from November 8.
Nationwide's standard mortgage rate will decrease by 0.25 percentage points to 7.49 per cent from December 1.
NatWest will reduce its standard variable rate from 7.99 per cent to 7.74 per cent, with a spokesman confirming: "We will be passing on the rate cut in full to our customers on a standard variable rate mortgage."
Skipton Building Society customers with base rate tracker products will see decreases no later than 14 days from November 7.
Coventry Building Society mortgages tracking the base rate will automatically decrease by 0.25 per cent, effective from December 1. The building society is currently reviewing rates on its standard variable mortgages.
All lenders confirmed their fixed-rate mortgages remain unchanged.
UK Finance analysis reveals around 1.8 million fixed-rate mortgages will end in 2025 and an additional 1.4 million fixed-rate deals are due to end, or have already ended, this year.
These homeowners may still face the challenge of remortgaging onto higher rates than they were previously accustomed to.
