Base rate: all-time low of 1.5% ‘not the bottom’
27 January 2009
Currently 1.5%, the Bank of England’s base rate has reached an all-time low – but is likely to sink further yet, experts believe.
After starting 2008 at 5.5%, the base rate dropped to 2% by the end of the year, and has already fallen to 1.5% this year. Predictions for 2009 vary, but many analysts have indicated that a base rate of 0.5% or even lower before the end of the year would come as no surprise.
So far, people with tracker mortgages seem to have benefited the most, with many taking advantage of falling rates to overpay their mortgages – effectively paying their mortgage off faster without actually paying more per month than they were used to.
But many first-time buyers and people looking for a remortgage have also found less expensive deals as a result of the base rate cuts.
Savers, on the other hand, have seen a decrease in the return on their money as banks and building societies reduced the interest they pay on accounts.
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Tags: base rate, remortgage, mortgage, mortgages, bank, bank accounts, bad credit, bad credit bank account
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