UK mortgage borrowing rates are lower than they have ever been before due to the Bank of England cutting rates twice in quick succession.
Currently the base rate is at a record low of 0.1% down from 0.25% before the Budget. This “almost zero” base rate could be good for those on tracker mortgages, first-time buyers and those looking to remortgage.
Will your current mortgage repayments fall?
Not everyone with a mortgage will see their monthly repayments decrease, because it depends which type of mortgage you have. For example, if you’re on a fixed rate mortgage your monthly repayments will stay the same. However, if you have one of the following mortgages you may see your outgoings reduced:
- Tracker
- Variable
- Discounted
Tracker mortgages
Because tracker mortgages move in line with the Bank of England’s base rate, your lender should honour the two rate cuts which would reduce your monthly repayments. The average saving for those on tracker mortgages could be around £50 per month (assuming your mortgage is around £150,000).
Variable rate mortgage
Those on variable rate mortgages, such as an SVR, could also see reductions as they’re designed to decrease or increase depending on wider economic circumstances. However, it’s completely at the lender’s discretion so it won’t be a given.
Discounted mortgages
Discounted mortgages work in a similar way to variable rate mortgages so again, people on these mortgages may or may not see a reduction in their monthly repayments.
Will it be easier for you to get a mortgage?
When the coronavirus pandemic hit and the whole country went into lockdown, many lenders imposed tighter restrictions on their borrowing criteria and pulled many of their mortgage products from their market. However, as we’ve recently spoken about, we’re seeing positive signs that the market is slowly returning to normal with lenders easing the tight restrictions and putting their deals back on the market.
So whilst there are no guarantees, you may be in a better position than you were in March.
Should you remortgage now?
If your fixed-term is coming to an end then you might want to think about remortgaging. There has been a rise in remortgage instructions recently so you’re better acting sooner rather than later as remortgaging can take time and lenders will be extremely busy. Remortgaging can take up to eight weeks under normal circumstances but could take longer with the remortgaging rush we’ve been seeing.
The best thing to do is get in touch with a mortgage broker.
Contacting a mortgage broker
As mortgage brokers in Manchester we can help you find you the best deal. Whether you’re looking to remortgage or get your very first mortgage, we’ll help you get the ball rolling and will advise you on the best type of mortgage for your specific circumstances and can give you advice on things like how long you should fix for. If you’re looking to get on the property ladder or are coming to the end of your fixed term, contact the team at TaylorMade.
