Deflation could mean £500 windfall for millions

If the bank cuts the base rate by 0.25% to just 0.25%, it will save the typical borrower with a £200,000 mortgage around £46 a month, or over £550 a year.

Simon Tyler, managing director of Tyler Mortgage Management, says people with trackers will be overjoyed but that anybody considering a fixed rate may do even better by waiting for another week or so.

He said: “The possibility of another cut in the base rate will likely have a lowering impact on swap rates which dictate how fixed rate mortgages are priced.

“If they fall further, we will see unprecedentedly low fixed rates over all time periods but especially two and five year deals.

“This is an extraordinary time to be getting a mortgage, but people need to remember that while rates may stay lower for longer, they should not commit to a loan in the belief that rates will stay this low forever. They must budget for a rise in rates at some stage, even if it is five years away.

“If anybody is looking a fixed-rate deal right now, it might pay to pause for a week or so just to see if rates dip a little lower. There is nothing to lose by delaying by a few days to find out.”