theguardian.com
Interest Rate Cut: Impact on Mortgages and Savings
The Bank of England cuts interest rates, but the impact on mortgages, savings, and loans is varied and uncertain.
English
United Kingdom
EconomyLabour MarketUkFinanceMortgage RatesInterest RateSavings Rates
Bank Of EnglandUk FinanceMoneyfactsNational Savings And Investments (Ns&I)Atom Bank
Nicholas MendesPeter StimsonDavid Hollingworth
- Will my mortgage get cheaper?
- No, for most people. Approximately 82% of UK mortgages are fixed-rate, unaffected by this change. Only those with tracker or standard variable rate mortgages will likely see a decrease in their payments.
- How about new home loan deals?
- The impact on new home loans is uncertain. While the Bank of England's cut might reduce borrowing costs, the budget and US election have added volatility, with some lenders increasing, and others decreasing, fixed-rate mortgage costs.
- So this is bad news for savers, isn’t it?
- The reduction may lead to lower returns for some savers, especially those with easy-access accounts or without guaranteed interest rates. However, some providers are increasing rates due to competition and the budget's effects.
- What about personal loans and credit cards?
- Most personal loan rates are fixed, so there will be no immediate change for existing borrowers. New borrowers might see slightly lower rates, while credit card rates are not directly tied to the base rate and won't automatically decrease.
- What should I do if my fixed-rate deal is ending soon?
- For those with fixed-rate mortgages ending soon, it might be wise to reserve a remortgage offer now, locking in a rate before further changes occur. However, base-rate trackers are also an option for those willing to accept some payment volatility.