Mortgages Uncovered

Lenders are now slashing their interest rates and there is a prediction of more cuts in the base rate.
RBS reduced some of its fixed rate loans from 0.35 – 0.6% and Abbey cut 0.15% of its 3 year deal.
This follows the sudden sharp drop in the swap rates which these fixed rate deals are based upon which now also means that there is speculation that other lenders will follow these measures by the end of the year.

There are plans by the Bank of England to cut interest rates by 4% in November in order to save the country from a deeper recession.

For the first time in a decade The Bank’s Monetary Policy Committee is cutting borrowing costs by 0.5% in forthcoming months suggest various economists.

Potentially millions of home owners who have tracker mortgages could see a few hundred pounds cleared off their payments. i.e. a £100K loan would give a saving of £600 per annum. Additionally, if lenders were to cut interest on fixed rate deals it would entice new borrowers into the housing market which would start to build momentum.

Capital Economics spokesperson Vicky Redwood, claimed rates may fall to 2.5% which will be the lowest figure since 1951.

The MPC would continue to “act aggressively”, she said. “Not only did all members vote for the 0.5 per cent cut at this month’s rate-setting meeting but the discussion was unambiguously dovish. The case for leaving rates on hold – or indeed cutting by just 0.25 per cent – wasn’t even discussed.”