News: Mortgages – BOE Drop Base Rate Again To 0.1 Percent In Shock Cut

19-March-2020
19-March-2020 15:38
in Private clients
by Jennifer Stevenson

Coronavirus is spreading quickly throughout the world and the effect on our economy is already being seen – with a particular effect on tracker mortgage rates which are currently hitting an all-time low.

What's happening?

In an unprecedented move the base rate has been cut further to 0.1%.

Last week, the Bank of England base rate was dropped to a historical low from 0.75% to 0.5%, in an effort to prop up the economy during the Covid-19 outbreak.

The result of the first cut had led to banks and building societies starting to reveal plans to roll out tracker rate mortgages which are around and below 1%. These changes are due to come into effect of April 1st 2020.

With the latest cut it is unclear whether lenders will follow suit.

Bank-of-England-BOE-quote

What does this mean for mortgages? 

There are various mortgage providers who are offering sub-1% two-year tracker rates (for those applying with larger deposit amounts).  

These include:

  • RBS
  • HSBC
  • Nationwide
  • Barclays
  • Scottish Widows for Intermediaries

To put this in context, from the 1st April the Nationwide Building society will be offering:

  • A base mortgage rate at 2.25%
  • A standard mortgage rate at 3.74%

For those who already have a tracker mortgage with Nationwide, you should see your rate reduce by 0.65% - for new borrowers, this rate will increase by 0.15%.

bank-of-england-base-rate-cut-shock

What does this mean?

We can’t know exactly what will happen next - such dramatic base rate cuts in quick succession are unprecedented. 

If you are considering what to do about your mortgage – now maybe the time to consider a tracker mortgage with initial rates below 1% APR. Banks and mortgage providers will be looking to remain competitive, so monthly repayments are set to come down further.

Ultimately when it comes to securing a mortgage, what kind you should get really depends on your circumstances.

If you are a person whose income would allow you to handle fluctuations in mortgage payments each month, then a tracker may suit you – but if you are someone who needs your outgoings to be regular fixed numbers each month, then a fixed rate mortgage may be the way to go.

Are you looking to take out a tracker mortgage to take advantage of these attractive rates?

Contact Clifton Private Finance to see how we can provide your financial solution

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