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Rate cut will help homeowners

PUBLISHED: 14:27 18 September 2001 | UPDATED: 10:31 03 March 2010

HOMEOWNERS look set to benefit from the Bank of England's decision to cut interest rates today in the wake of the US terrorist strike and yesterday's half-point cut by the US Federal Reserve.

HOMEOWNERS look set to benefit from the Bank of England's decision to cut interest rates today in the wake of the US terrorist strike and yesterday's half-point cut by the US Federal Reserve.

The decision by the Bank of England's Monetary Policy Committee to cut rates by 0.25% will mean homeowners can expect to see repayments on a £60,000 mortgage drop by £9.12 a month.

If lenders pass on the full reduction borrowers will see their monthly payments fall to £377.46 from £386.58.

Since the beginning of the year rates have fallen from 6% to 4.75% knocking more than £80 a month off the cost of an average mortgage.

Virgin One was quick to pass on the rate reduction to borrowers, cutting its variable mortgage rates by the full 0.25%.

The new rate for the One account is now at its lowest ever at 5.95%, and will be available to new and existing borrowers from September 19.

Scott Mowbray, marketing manager at Virgin One, said: "In light of the MPC announcement today all Virgin One customers will be benefiting from a full and immediate cut in interest rates.

"Given the unfortunate circumstances surrounding the bank's decision it is appropriate that we play our part in aiding consumer confidence."

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