Interest rate cut: Impact on credit cards, savings and mortgages

Subbu, 48, lives in Dorset with his wife and children.

When the interest rate on his mortgage went up from 2.1% to 5%, his monthly repayments increased by £1,000.

His current mortgage is up for renewal in 2028, so he is now using a credit card to pay for the increased costs. The interest rate on his credit card is 23%.

A quarter percentage point cut in rates is not helpful enough, he says.

“It’s really tough at the moment, I find that any excess cash goes on our basic living needs and we really don’t have much leftover at the end of the month.”

Subbu is speaking to a broker to release some equity from the house to pay off his credit card. That might mean higher repayments on the mortgage, but he feels that this could be a better solution as it is paid off over a longer period of time compared to a credit card.

“It’s been very stressful, I don’t know how others manage. I hope that by the time we remortgage again, rates are a lot lower.”