Mortgages: base rate cut to 1.5%
9 January 2009
The Bank of England today cut the base rate by half a percent to 1.5% – the lowest rate since the Bank was established in 1694 – leading existing and would-be homeowners to hope for further reductions in mortgage rates.
Homeowners on some tracker mortgages will automatically benefit from the 0.5% cut, while people looking to take out a mortgage in the near future will hope that lenders also cut rates on fixed-rate mortgages.
However, a number of tracker mortgages carry ‘collars’ which prevent their interest rates falling below a certain level, meaning that some people on tracker mortgages will not receive the full cut.
A mortgage expert for Think Money commented: “Any base rate cut is welcomed by the mortgage market in general. Not everybody will benefit, but many will enjoy lower mortgage payments, and it also improves the long-term chances of fixed-rate mortgages becoming cheaper.”
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Tags: mortgage, mortgages, mortgage base rate, base rate, base rate cut, tracker mortgages, tracker rate mortgages, fixed mortgages, fixed rate mortgages
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