A shock result from the Bank of England as they cutinterest rates by one-and-a-half percentage points, the lowest base rate since1955.
Initially the news was welcomed by millions of homeownersas they have been struggling with high mortgage repayments. However as mortgagelenders base they lending rates on the rate they lend between each other,called Libor (London Interbank Offered Rate), some providers may not pass onthe rate cut in full as the Libor is currently much higher than the UK baserate.
Banks didn't expect such a big cut from the Bank ofEngland and their mortgages are currently under review as they ponder what rateto reduce their offers by, if any!
The good news for UK mortgage holders is many of themortgage lenders have now announced they will be passing on the base rate cutand in full to their customers.
As a mortgage holder it is worth checking with yourprovider to see the rate they are now offering you. Those with tracker ratemortgage that are linked to the bank of England base rate can expect to savearound ?134 on an average ?150,000 mortgage.
Those on standard variable rate mortgages are advised tosearch the market now, as you can see from our example, hundreds of pounds permonth can be saved on your mortgage. The standard variable rate is the rate youprovider normally transfers you to after your current fixed or tracker mortgagedeal has ended. You definitely don't want to be on this rate as it can be over7%, some charging over 10%.
Using a mortgage broker will allow you to quickly andeasily search the market, using a mortgage broker that offers whole marketadvice will ensure the best deal is found for you. Whether you want a Fulhammortgage or a , a mortgage broker can help save money butwill also be clued up on the market to offer valuable advice.
Even those on a tracker mortgage that are benefiting fromthe full rate cut can save even more by comparing the market as more choice isnow available.
