On what seemed like a relatively normal Thursday, the Bank of England base rate has changed – something we haven’t seen for seven years, at midday Mark Carney has confirmed that interest rates are being reduced to record lows of 0.25%. A new stimulus package has also been introduced. It is clear that this is an attempt from the Bank of England to cushion the potential shocks of BREXIT. Many homeowners and property investors with tracker and variable mortgages are seeing a reduction in their mortgage payments which brings much joy to general consumers with mortgages and investors alike. Interest on debt will also be reduced for many and burrowing for business will be lower. Although businesses can benefit from reduced interest on loans, the pound has been hit in the short term meaning that any businesses importing goods may feel import costs have increased further than they already have which is a squeeze on margins and profitability. Of course a weaker pound for exporters has the opposite effect and works in their favour.
Because of the news, a new range of cheaper fixed products are being introduced on to the market as we speak so if you are looking to fix, now is a good time. Burrowing to buy a property is even cheaper now than it has been previously been and we expect lenders to reduce criteria on rental income on buy to let mortgages meaning you could achieve more burrowing than previously. Mark Carney has confirmed that savings on interest rates will be passed on to consumers and have a new initiative to make sure banks are lending. We therefore feel that that with the extra stimulation, banks will be offering mortgages and loan products at exceptionally low rates. Call us at www.ratedfinancial.co.uk on 0208 432 4566 to discuss the best rates available so we can get you the best deal if you are looking to buy or refinance.