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

19-March-2020 15:38
in News
by Admin

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.


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%.


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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