- Bank of England has cut the base rate of interest in a bid to boost economy
- Base rates are as low as 0.25%
- Mortgage rates at a record low of 0.99% for 2 year fixed rates
The Bank of England has now cut base rates to a record low of 0.25%.
According to This is Money, the new base rate is the lowest it has been in 322 years which is equivalent to the entire existence of the Bank of England. The news was announced as an attempt to help the economy find stability in a post-brexit world. It has been confirmed that the bank will pump an extra £60billion into the economy through quantitative easing whilst making a further £100billion available to banks in funding to lend to homeowners and businesses.
As a result, major high street lenders were quick to confirm cuts to their own standard variable rates. Halifax being one of them stated that they will cut most of their two & five year fixed rates by extreme lows – as much as 0.3%
Although mortgage rates are breaking records for being low at 0.99%, it is still unclear what the impact on fixed mortgages will be. The Council of Mortgage Lenders estimates that around 50 per cent of borrowers are currently on fixed rates and will therefore see no immediate impact on their payments. Those on tracker rate mortgages however, will already see a difference.
Until fixed rate contracts end, it is not likely borrowers will see deals priced more cheaply than they already are. This hence deems speaking to a good mortgage broker as a wise move.