Following on from the Chancellor’s announcement last week regarding the base rate reduction of 0.25%, we have gathered together expertise from our mortgage advisors to explain what this really means.
Yorkshire and Lincolnshire adviser Kylie-Ann Gatecliffe of KAG Financial offers her advice:
“The current rate is 0.25% following the steepest cut since 2008. Although tracker products will automatically reduce in line with this drop, it appears so far that fixed rates are not planned for change.
“We have actually had communication from one lender that their fixed rates are increasing. Current fixed rates are already extremely low, so it doesn’t look likely that lenders will be reducing them even further.
“However if this does happen, and you have an application ongoing, this will be reviewed to ensure you complete on the best rate possible. If you do wish to look at your existing deal whilst rates are low, please get in touch.”
Michelle Clements, another Linear advisor based in Lincolnshire, offers a further view:
“If you currently have a Tracker Rate Mortgage, then you will benefit from the base rate reduction.
“If you are on a Fixed Rate Mortgage, your payments will remain the same for the current length of your initial deal period.
“If you have a Discounted Rate Mortgage, whether you will benefit will heavily depend on if your particular lender will follow suit and reduce their Standard Variable Rates. But note, the Standard Variable Rate set by a lender is completely at their own discretion, so there is no guarantee they will reduce this.
“If you are a new client going through the buying or re-mortgaging process, then please rest assured all deals will be double checked to ensure you are on the best available deal for your personal circumstances.”