Independent Financial Life Planners Bishop's Stortford: Bank of England interest rates cut to 0.25%

Monday, 8 August 2016

Bank of England interest rates cut to 0.25%

What does it mean for your mortgage? Enable’s IFAs in bishops Stortford know that a mortgage is without doubt the biggest debt taken on by the majority of households in the UK. Its estimated 11.1 million households have one and the average amount still left to pay on each home loan is £116,000, according to the Council for Mortgage Lenders.

Mortgage holders who will see an immediate benefit from the cut are those people who have bank rate tracker mortgages, as their loans have an interest rate that goes up or down in direct relation to the Bank of England's decision. One in five mortgage holders have this type of loan.

But nearly a third of mortgage holders (29%) have home loans that are on the standard variable rate which is also the default option after a fixed term has run its course and these borrowers will be in the hands of the lender. Some mortgage providers may pass on cuts in full, some may decide on a partial cut, whilst others may make no change at all given the historical low levels of interest rates. However the Bank of England’s governor Mark Carney has said banks have "no excuse" not to pass on the cut to households.

Almost half (46%) of all mortgage holders are on fixed-rate mortgages and they will see no change in their mortgage rate. However, if their mortgage term is up soon, they may find they pay less if or when they sign up to a new one. Fixed mortgage rates on new deals have been falling even when there was no change to the Bank rate. An increasing number of people have signed up to longer term fixed rate deals for up to 10 years. If you need to renew or review your mortgage Enables IFA’s in Bishops Stortford are happy to help.

YOUR HOME COULD BE AT RISK IF YOU DO NOT KEEP UP YOUR MORTGAGE REPAYMENTS

Source: BBC

Issued by: Enable Independent Financial Life Planners •  25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 - Fax: 01279 657339 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority. It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us. NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

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IFA Bishop's Stortford

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