Will we see universal mortgage rates fall now the base rate has been cut?

Interest rates have been cut by 0.25%, and in light of this news many home-owners are expecting mortgage rates to fall too. Indeed, Mark Carney for the BoE, today stated that lenders will have no excuse not to pass the rate cut on. However, mortgage trade bodies aren’t so optimistic, and are questioning if this will happen.

While as a fixed mortgage rate holder you wouldn’t expect your rate to fall, those on an SVR and are likely to expect something different. However, for many expectations are unlikely to be met. So far only two UK lenders have said their SVR will fall – Barclays and Santander.

Those on a tracker may find nothing changes if they agreed a deal with a ‘collar’ beyond which their rate can’t fall. It’s important to check your offer if you’re on a variable rate to see what you agreed.

With around 50% of mortgage holders sitting on a fixed rate, many will see no reduction in their monthly repayments.

The bank rate is not the only factor to influence mortgage pricing, since the rate fell to 0.5% in March 2009 average rates have fallen by 0.9%. We will have to wait to see if lenders are prepared to cut rates further - it’s a possibility but not a foregone conclusion.

It’s possible high street lenders have already anticipated a rate cut and have factored this into their pricing.

At the moment rates are at record lows making now a good deal to take out a mortgage to buy property or switch to a lower deal.

Don’t just wait and hope for rates to fall, if you are looking for a cheap offer, make a ‘whole of market’ search now to find the deal that will save you the most money each month.

If you need help with your search call us at Deal Direct on 0800 048 8828 - we are both ‘whole of market’ and independent.

Our advisers offer no-obligation independent advice, and are here to help as many people as possible climb on the property ladder or switch to a lower rate deal.

For advice and a quote call 0800 048 8828.