The Bank of England had announced further reductions to the base rate. The current base rate is now at 0.1%, the lowest it has ever been in the UK.
Previously, the Bank of England had announced an emergency reduction in interest rates to support the economy amid the coronavirus outbreak. The Bank base rate was previously down to 0.25%. However, further reductions have been announced since then.
We wanted to inform you that this could have an effect on your monthly mortgage payments and we would advise you to contact us at SJ Financial Solutions to find out how the reduced base rate will affect you.
If you currently have a ‘base rate tracker’ mortgage, then your monthly mortgage payments will be reduced from next month. Some people may not be able to see the reduction because of something called a ‘floor’ on their mortgage rate. A ‘floor’ is when the lender has set an interest that the mortgage rate can’t go below. Landlords and homeowners on the standard variable rate will need to see if the reduction in the base rate is being transferred across. They should receive a letter from their lender in the next few weeks to inform them if a decrease is being applied.
If you currently have a standard variable rate with your lender, then please feel free to give us a call to see if we can help you lower your monthly mortgage payments.
If you have a fixed mortgage rate, then your payments won’t be affected by the reduction until their introductory rate comes to an end. At this point, your lender’s standard variable rate will come into effect, so it would be wise to check how much your mortgage payments will be reduced by, compared to the amount indicated when you took out your current fixed mortgage rate.
If you have any questions about the reduction in the base rate and how this might affect your mortgage payments, then please feel free to get in touch with our mortgage advisors at SJ Financial Solutions.
About Stuart Mosley
Stuart Mosley (CeFA, CeMap, CLTM) founded SJ Financial Solutions in June 2005 having spent 12 years with big corporates such as Halifax and Santander. He felt the personal touch and straight speaking was missing from financial and mortgage advice services and set up SJ Financial Solutions to change this.
If you would like to book an appointment then please get in touch and we can arrange a suitable time to discuss further. We can arrange appointments at a place and time suitable to you, we can discuss your options over the phone or if you prefer email, then this is fine with us.