Most people who have a homeowner loan or mortgage secured on their home will undoubtedly already be aware that the cost of their loan has fallen significantly since October last year, when the Bank of England’s Monetary Policy Committee (MPC) started to lower the base rate of interest in order to combat the effects of the credit crunch and recession and, although some borrowers have benefitted from a reduction on their secured loan repayments more than others, as an average figure, the monthly interest cost on a typical homeowner loan has fallen to almost half the figure it was prior to October last year.

For the twelve month period leading up to April this year, the average cost of running a home (taking into account loan repayments and gas and electricity bills, etc) had fallen from £8766 for the year, to £7298, an overall reduction of 17 per cent, despite an increase in the cost of gas and electricity, according to the latest statistics from the Halifax. The main reason for this fall was due to a reduction in the cost of secured loan interest repayments of 47 per cent on average, with the average interest rate falling from 5.8 per cent to just 3.62 per cent in the twelve month period leading up to April 2009.

Suren Thiru, an economist at the Halifax commented on the change in rates “With mortgage interest payments declining by almost half over the past year, the annual cost associated with owning and running a home in the UK has fallen significantly. Such a sizeable drop in the costs of running a home will help ease the pressure on household disposable income, providing some welcome relief for homeowners.”