As you may have heard on the news this morning, the Bank of England base rate has been cut to 0.25%.
Base rate cut to 0.25% The Bank of England has announced an emergency cut in interest rates to shore up the economy amid the coronavirus outbreak. The Bank Base Rate is down by 0.50%
We just wanted to let you know that this could affect your monthly mortgage payments. We would advise that you call us to find out how the base rate cut will affect you. If you have a “Base Rate Tracker” mortgage, your monthly mortgage payments will reduce from next month. Some may not see the reduction due to what is called a “floor” on their mortgage rate where the lender has set a interest rate that the mortgage rate cannot go below. Homeowners and landlord on their Standard Variable Rate will have to see if the reduction in the base rate is passed on – they should receive a letter from their lender in the next few weeks if a decrease is being applied. If you are on your lenders Standard Variable Rate, we would recommend that you call us to see if we can help you to lower your monthly payments.
The Bank of England Base rate cut will not affect fixed rate Mortgages
For those customers who have a fixed rate mortgage, payments will not be affected by the fall until their introductory rate comes to an end. At this point their lender’s standard variable rate will come into play so for them, it’s wise to check how much their payments will reduce compared to the amount indicated when they took out their current fixed rate mortgage.
Remember, if you would like to talk to an expert about your current borrowing needs, or you would like to know how the fall in the Bank of England Base rate impacts you, just give us a call and we’ll be happy to help.
