What does the base rate change mean for mortgage rates?
The Bank of England has reduced the Base Rate from 0.5% to 0.25%. With many people predicting the next base rate movement would be up, after over 7 years of the Bank keeping the base rate at 0.5%, we have finally seen some movement and for existing and potential mortgage borrowers it is likely to be good news.
David Blake of Which? Mortgage Advisers said:
“For those already on some tracking rates they might see a reduction in their rate of interest and monthly mortgage payments shortly. I say some tracking rates because not all borrowers on tracking rates will feel the benefit of this reduction as some tracking rates have floors on them meaning the rate will not go below a certain percentage.
More often than not, when there is a reduction in the Bank of England base rate mortgage rates come down. That said, as rates have already been historically low we could see a very minimal reduction to the cost of borrowing this time round if any at all. The reduction in the base rate may make short term tracking rates look very appealing to potential borrowers or those thinking about remortgaging. However, those looking for longer term stability may also be pleased as longer term fixed rates should also look very well priced.”
It’s always best to speak to an independent mortgage adviser. Our Which? Mortgage Advisers can chat through your current mortgage to see if you could save by switching. Call us on the number above today or request callback.