Last week saw Team GB breaking records in Rio and back home, Team MPC were busy setting records of their own.
The Bank of England’s Monitory Policy Committee voted unanimously to reduce the Bank of England base rate to 0.25%, in order to stimulate growth in the economy post Brexit. This is the lowest the bank rate has been in its history.
Although the Governor of the BOE, Mark Carney urged banks to pass the rate cut on, a week or so later and the results have been a mixed bag!
Only borrowers on tracker mortgages will see an immediate benefit, this covers about one in five mortgages.
Plenty of borrowers are on fixed rate mortgages, and they will see no change. However, if their mortgage term is up soon, they should contact us to find them a new one. The chances are they will be able to find a cheaper one, as fixed mortgage rates on new deals have been falling - even pre Brexit and pre base rate cut!
About one in 3 mortgages are on their lender’s Standard Variable Rate (SVR) which is the default rate lenders offer once your fixed /discount /special rate has finished. Those borrowers will be in the hands of the lender. Some mortgage providers may pass on the cut in full, some may decide on a partial cut, others may make no change at all. Remember for every mortgage borrower who gets a rate cut, a saver gets a bit shaved off their interest, so you can see why banks are reluctant to pass it on.
A handful of banks quickly announced that they would pass the cut on in full from September, with others expected to follow suit. A separate scheme announced by the Bank - called the Term Funding Scheme - is designed to ensure that banks pass on the rate cut.
ANYONE ON THEIR LENDERS SVR NEEDS TO TAKE ACTION NOW!! Even if your lender does pass on the rate cut, the chances are you can still do better elsewhere. Some lenders SVR rates are still just shy of 5%, when other lenders will offer rates sub 2%.
For more infomtion or to speak to a mortgage adviser contact us on 01628 507477.
Recent posts
The government has announced plans to make buying or selling a home cheaper and quicker with what is being called the “biggest shake-up to the homebuying system in this country’s history.”
More borrowers using equity release
16 days ago
Almost one in five equity release mortgages are now taken out to provide financial support to family.
Buyers purchasing properties sooner
18 days ago
According to industry data, the expected wait for those looking to buy a property has dropped from just over 11 months to less than six months.
It is common for your first mortgage payment to be higher than your subsequent monthly payments for two reasons.
What to do just before you get your keys
23 days ago
Firstly, a big congratulations, you’ve now exchanged contracts! After weeks and months of waiting, you are about to move in. What should you do first?
The chancellor will deliver her second budget this autumn. Due to slow economic growth and high inflation, the government need to manage a £40 billion shortfall in public finances. There have already been reports about changes to taxes including income tax and capital gains tax.
Landlords could face a new tax this autumn
29 Aug 2025
The chancellor has advised that landlords could have another tax to pay this autumn as the Treasury decide whether to extend national insurance contributions to rental income.
According to a report in the Guardian, senior ministers have asked Treasury officials to look into a “proportional” property tax to see how it would work as an alternative to the existing stamp duty land tax on owner-occupied homes.
More information
Trusted by
