In past articles, we’ve written about the Bank of England’s Base Rate and LIBOR.

Here we look at what might happen to mortgages if the Bank of England take the unprecedented step of reducing mortgage rates below zero!

First of all, considering existing fixed rate deals, we are unlikely to see fixed rate mortgage rates fall, even if the Bank of England Base Rate goes negative. The clue is in the title. The rate agreed is fixed for an agreed term. Thereafter, most fixed rate deals revert either to the mortgage lender’s Standard Variable Rate (SVR) or to a rate linked to the Bank of England’s Base Rate or some other datum, plus a percentage.

Unfortunately, for borrowers, many mortgages have a collar below which the loan rate cannot fall, meaning that a negative Bank of England Base Rate would not affect the Borrower’s Rate.

Where there is no collar, loan rates might fall lower still, but it’s unlikely that they will fall much given the already historically low lending rates available today in the market.

In order to better establish if you are currently enjoying the best terms on your home loan, contact Mortgage Required for a free evaluation of the options open to you.

Related articles:

 

Recent posts

With the stamp duty relief ending in England and Northern Ireland, we have listed the top 10 cheapest areas for first-time buyers as published by Rightmove. 

Are you looking to purchase your first home but unsure where to begin? Here are some tips to get you started.

Choosing which fixed rate to go for has been a dilemma for many of our clients so far this year. There really isn’t a right or wrong answer, but below we will look into the pros and cons of a two-year and five-year to help you make the right decision for you.

Here are the lowest fixed mortgage rates of the week, available to first-time buyers, home movers, buy-to-let, and those remortgaging.

Call us for more information: 01628 507477 or email: team@mortgagerequired.com.

According to Rightmove, a whopping 500,000 UK homebuyers are rushing to finalise their home purchase before the new Stamp Duty rules change in April.

The UK government is introducing new rules for Energy Performance Certificates (EPCs) that will impact landlords. Here's a summary of the key changes

Choosing to buy a house is one of the biggest decisions you are likely to make in your lifetime. There are many factors that influence a house purchase, these include: finances, housing market conditions, and mortgage rates.

Since being launched back in 1999 Individual Saving Accounts (ISAs) have been very popular for those wanting to put money into savings. There are four types of ISA, and the majority allow flexible saving and the ability to withdraw funds easily. There are financial penalties on certain products, these usually pay the most interest.