Interest Rate Cuts – Lee Chiswell 20th March 2020
The Bank of England has cut interest rate to a record new low, originally 0.75% cut down to 0.25% and then slashed to 0.1% – the lowest ever rate in the bank’s 325-year history. This was announced on March 19th by the Bank’s Monetary Policy Committee.
How will the interest rate drop affect mortgage customers?
If you’re on a fixed rate mortgage.
If you’re already on a fixed rate deal then nothing will change. Your deal will remain the same for the duration of your fixed term, however if your fixed rate is nearing its end a new fixed rate deal may potential be cheaper in the future.
If you’re on an SVR or Discounted mortgage.
If you’re on the lenders standard variable rate (SVR) or a discounted mortgage deal, this will be down to each individual lender as to if they reduce their own variable rate, and if so by how much. Even if your SVR rate is cut it is still worth speaking to one of our mortgage experts who can run through the best options available to you
If you’re on a tracker mortgage
Your mortgage will track the Bank of England base rate so mortgage costs should drop. There are certain mortgage lenders which have what’s known as a “collar” which prevents rates falling below a certain level.
If your mortgage rate is affected your lender will be in touch with all the details.
Is it a good idea to get a mortgage now or should I wait?
With interest rates so low and the number of lenders who are in the market, now is a great time to either get your first home, move to a new house or remortgage to raise extra capital or reduce your mortgage term/reduce your payments. The specialist market may however tighten up, this is due to how some companies raise the money to be able to lend. We expect a few products from specialist lenders to be removed and affordability checks to be tightened in the short term
As always, the best advice is to speak to a mortgage broker – for the most up to date and correct information call us on 0300 124 5655 or complete our quick enquiry form.