The Bank of England has lowered interest rates for the first time in more than seven years, reducing them to a historic low of just 0.25% from 0.5%.

Four lenders immediately promised to pass on the 0.25% cut in rates in full to all of their borrowers on variable rates, but there are other lenders who have not yet declared their hand.

The governor of the Bank of England, Mark Carney, said that “The banks have no excuse not to pass on this rate cut” and he advocated borrowers to shop around and move to another lender if their lender does not pass on the cut in full.

This should affect every variable rate mortgage.  So if you are on a ‘base rate tracker’ mortgage, your lender’s ‘standard variable rate’, or any other form of variable rate mortgage, then you should hear from your lender within the month, telling you that the amount you pay on your mortgage each month will go down.

If you do not hear from your lender, or if they tell you that your mortgage is going down by less than 0.25% then you should get in touch with us as soon as possible so that we can review your mortgage and see if you are still on the lowest rate that you could be.  With some mortgage rates down as low as almost 1%, there has never been a more affordable time to have a mortgage.

Of course, your rate will not drop if you are on a ‘fixed rate’ mortgage.  In this case the amount you pay will be fixed usually for either two or five years, so you pay the same amount every month.  Many people prefer the security of knowing what their monthly payments will be and these people will be unaffected by the drop in interest rates until their fixed rate period ends.  In fact, it is still an incredibly good time to take out a fixed rate mortgage, as again, the rates on these are at a historic low at the moment and this will protect you from any rate rises that there may be a year or two down the line.

If you are unsure about what rate you are on, whether it is the best rate for you, or if you do not think your lender has passed on the rate cut to you when they should have done, then book an appointment to speak to one of our friendly and professional mortgage advisers. We will go through your mortgage with you and ensure that you are on the very best rate and mortgage type for your personal circumstances.

Contact us today on 0333 358 3822

The Bank of England today as widely reported cut base rate to 0.25% after a record low of 0.5% for seven years.  Todays cut may be an important psychological boost to markets and manufacturers but it is uncertain what impact it will have on house sales and mortgages.

Firstly it is not clear whether high street mortgage lenders will follow and cut their rates for you and I as most are under no compulsion to do so.

Secondly, the number of buyers with tracker mortgages that to some extent mirror the movement of the Bank of England base rate is far smaller than before, as increasing numbers of people have been opting for fixed rates while interest rates were at record lows.

Despite it’s uncertain effect on the housing market in the short term many commentators regard todays cut as almost inevitable.

“Markets don’t like surprises and everyone is expecting it.  The data worsened a lot since the last meeting so the expectation is – and I am pretty sure that the members of the Monetary Policy Committee will sit there and think… we’re going to have to” said Danny Blanchflower, a former MPC member, on BBC Radio this morning.

If you would like to see how your mortgage payments could be effected please feel free to get in touch with one of our free impartial mortgage advisers on 0333 358 3822

Well, at the time of writing, it’s two weeks today since the result came in that, as a country, we voted to leave the European Union, and it is clear that we are now in a slightly more topsy turvey world.

The positive is that there has been no negative effect as yet on the housing market. While commercial property and the London market show signs of being negatively affected, what I have seen so far for normal people on the street, has only been positive where mortgages are concerned.

Ultimately we all still need somewhere to live, this means that people like you and I are continuing to buy and sell houses. Young people still need to get on the housing ladder, families still need to move into bigger houses as their family grows and older people will continue to want to downsize as the family home gets too much to manage after their children have flown the nest.  In addition, with the stock market rising and falling at a rate that would rival any roller coaster, people still want to invest in property to let out as housing is starting to look like a safe bet.

The good news is that lenders still have a lot of money to lend and mortgage rates have actually dropped in the past two weeks.  Since the Brexit vote fixed rates have fallen and are expected to drop to under 1% in the next week or two.

Other lenders have introduced cheaper ranges of buy-to-let mortgages, which means that it now costs less per month when you buy a house to rent out.

At the same time some lenders want to offer certainty in this uncertain world and several have introduced ten year fixed rate mortgages. This means the people taking out these mortgages will know exactly what they are going to pay over the next ten years.  Therefore even when mortgage rates rise, which they inevitably will do in the longer term, mortgage holders with ten year fixed rates, will still be paying the same low rates that they are now.

So why are lenders suddenly cutting their rates?  The fact is that most lenders get the money they lend from the money markets from what are called ‘swap rates’, and the rates here have fallen, so lenders can pass the savings on to the public.  In addition, there is a wide expectation that the Bank of England will cut the base rate of interest and will put more money into the markets.  All of this is good news for borrowers.

As with everything at the moment, no-one knows how long this is going to last, so if you are thinking of getting onto the housing ladder – or if you haven’t looked at your mortgage rate for a while, now is a good time to give us a call as you could be saving money using our fee free re-mortgage service, not only now but for the long term too.