The base rate cut, what does it mean for you?

Last week's unanimous decision by the Bank of England Monetary Policy Committee to reduce the base rate by 0.25% was the first time we have seen the rate change since 2009. The move is designed to add extra stimulus to the UK economy whilst it adjusts to the EU referendum.

This cut in the bank rate should lower borrowing costs for households and businesses. However, as interest rates are close to zero, the BoE has suggested it may be difficult for some lenders to reduce deposit rates further. This may limit their ability to cut lending rates.

If you are on a tracker mortgage, which follows the Bank of England Base Rate, you will see a reduction in your monthly payments. Existing fixed rate mortgages will remain the same, and the Standard Variable Rates may reduce depending on whether that specific lender decides to pass on the reduction.

If you would like to discuss the impact of these changes please give us a call on 01444 443439.

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