Even lower mortgage deals expected following Brexit

July 4, 2016 by Brendan

Lenders

According to mortgage experts, it is possible that mortgage deals may soon be cut to even lower rates, as the Bank of England has been tipped to cut the base rate to 0.25% by the year end.

Following the EU referendum result to leave the European Union, there is speculation that the base rate will be cut, and lenders are already deciding whether to launch new, cheaper deals. However, new low rate deals could pose a predicament for borrowers, as they have to decide whether to sign up for a new deal immediately, or wait to see if a better deal is introduced at a later date.

Mortgage broker at John Charcol, Ray Boulger, said:

“I am convinced rates are going to come down, so my advice would be for borrowers looking for a fixed-rate mortgage to hold off until lenders act.”

Boulger added that borrowers would also have to decide which type of deal they would select, either a tracker or a fixed rate deal. Although payments are fixed with a fixed rate deal, tracker mortgage payments will alter according to whether the base rate lowers or increases.

The cost to banks for the deals has fallen since Brexit, so experts believe that lenders will offer even more deals in the near future. However, borrowers still have to decide which deal offers the best value and which is the most suited to their circumstances. As mortgage advisers are required to study for CeMAP, they have the knowledge required to advise buyers.