What does the fall in UK interest rates mean for borrowers?
In recent weeks, the Bank of England governor, Mark Carney, announced that interest rates will be dropped from an already record low of 0.5% to 0.25% in an effort to minimise any damage done to the economy by the Brexit referendum result.
In this article, Oracle’s expert independent mortgage brokers discuss what this means for borrowers.
If you have a tracker mortgage, you can expect lower repayments
If your mortgage is on a tracker deal, your repayments should naturally fall by 0.25% in line with the 0.25% fall in UK Mortgage interest rates. This means that if you have for example a £150,000 mortgage, you should be paying about £20 less a month on your mortgage repayments.
However, there has been a huge reduction in recent years in people opting for a tracker mortgage, due to fears of an increase in UK interest rates.
If you have a fixed or variable-rate mortgage, you might not see any changes
If you are on a fixed-rate mortgage deal, you will be unlikely to see any reduction in mortgage payments, as you will continue paying at the interest rates you agreed to when taking out the mortgage – however, you may find better deals if you remortgage. One of Oracle’s independent mortgage brokers can advise you on finding a better mortgage deal.
As for variable-rate mortgages, although banks and lenders can use their discretion when it comes to reducing mortgage interest rates, Bank of England governor Mark Carney has made it clear that they are expected to reflect the UK interest rates cut in their mortgage interest rates.
Should you remortgage?
Even if you are on a fixed-rate mortgage, you might find a better deal by shopping around and remortgaging. However, you should first check your current mortgage contract for any penalties you might be liable for.
Find the best mortgage deals with Oracle’s expert independent mortgage brokers
Whatever the UK interest rates, Oracle’s expert independent mortgage brokers can help you find the best mortgage deals. Being independent means we look across the whole financial market and the only reason we will choose any particular deal is because it is right for you.
Get in touch with an expert independent mortgage broker now by calling 020 7112 8842.