UK interest rate cut: how it will affect you?
Adapted from an article by Hilary Osborne from the Guardian 4th August 2016
The Bank of England has cut interest rates, taking the base rate to a new low of 0.25%. This is the first cut since March 2009, and how welcome it is will depend on your financial situation. The Bank also announced a new round of quantitative easing (QE) – pumping money into the economy to buy government bonds.
What does the cut mean for mortgages?
For anyone with a fixed-rate mortgage, it does not mean anything. But if any of your borrowing is on a variable rate then it’s likely to be good news.
The 1.5 million borrowers with mortgages that track the base rate will see their monthly repayments fall, probably from the start of September. For a homeowner on the average variable mortgage rate of 2.86% and a mortgage of £150,000, a reduction in line with the base rate will mean monthly repayments falling by £19.68 to £687.
Message from Phil Clark at Bristol Mortgages Online:
If you are looking for a First Time Buyer deal, a Home Buyer Mortgage or to Remortgage and cannot decide between a fixed rate or tracker mortgage, call us today on 0117 325 1511 for a free consultation with one of our expert Advisers.