Can you expect a mortgage interest rate cut any time soon?
Recently the Bank of England warned of a mortgage interest rate rise over the summer. Home-owners were told to buckle up as the mortgage ride could get bumpy ride as rates were set to significantly rise.
However many home-owners are breathing a sigh of relief as since this warning a great deal has happened.
The IMF have called for a base rate drop to 0.25% or even 0%.
Experts said this would never happen, and if it by some miracle it did there was likely to be little benefit for mortgage holders as their mortgage interest rate would probably remain the same.
With lenders already experiencing higher funding costs the view was they would be not pass on any price reductions, they would probably prefer to boost dwindling profits.
Since the IMF made the call money markets have made an about turn and have revised their opinion, they are now indicating a base rate cut to perhaps 0.25% could happen by the end of the year.
The eurozone crisis has increased mortgage funding costs which has led lenders to bring in rate increases, however there is some good news.
The Chancellor has proposed releasing around £100 billion in funding to support the UK economy through small business lending and cheaper mortgages, which may mean a cut in rates.
With UK lenders having access to cheaper funding it is hoped lenders will bring in a market wide mortgage interest rate cut.
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