What does Bank of England base rate cut mean for you?
On 11th March, the Bank of England (BoE) slashed interest rates from 0.75% to 0.25% to help reduce the impact of COVID-19 on the economy and on the 19th March, it cut rates still further to a record low of 0.1%.
But what does this mean for you and your finances?
Reduced mortgage payments
If you are one of the 11% of borrowers on a 'tracker rate' mortgage, you will see a reduction on your mortgage repayments. This is because tracker mortgages follows or 'tracks', the BoE base rate. Similarily, those on variable rate mortgages (comprising 14% of all UK mortgages) should also benefit from the base rate cut.
However, you'll lose out if you're on a fixed rate deal, so consider remortgaging while deals are still available.
Bad news for savers
Savers are set to recieve even less of a return on their investment. Still, some accounts will have a better rate than others, so it's worth shopping around.
A blow for first-time buyers
With lenders pulling 'riskier' products off the market, first-time buyers could struggle to secure a deal. Those still saving for a deposit could also face setbacks if the values of their savings drops.
You may have to pay an early repayment charge to your existing lender if you remortgage
We can help you!
If you would like more information or help with your mortgage please call us on 01344 225 149 or 07979 690 056. Alternatively please send us an email at info@simmondsmortgage.co.uk
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