Fixed rate or tracker deal now that BoE base rate has been cut?

Following the recent cut to the Bank of England base rate, home owners have been calling mortgage advisers to ask whether they should consider swapping their deal for a tracker mortgage.

There are around 1.5 million home owners with a deal which tracks the BoE base rate, and they will all receive a cut of 0.25% in the near future. However, experts state that it is possible to save more money with a fixed rate mortgage.

Lenders often raise the rates on their tracker deals for their new customers, in anticipation of Bank of England rate cuts. However, fixed rate deals are at their lowest, so that they are cheaper than the best tracker deals and you have the security of knowing how much your mortgage payment will be for the next couple of years.

According to the director of Coreco mortgage broker, Andrew Montlake, even if the Bank of England base rate falls yet again, the cost of mortgage payments is unlikely to fall significantly and are unlikely to be lower than the best fixed rate deals.

Out of 20 building societies and banks, just 14 have pledged to pass on the rate cut to customers. Fixed rate deal customers won’t see any change to their monthly mortgage payment. It is also possible that the interest rates will rise at some point, which will mean that mortgage costs will increase. Speaking to a mortgage adviser who has received CeMAP training will help you to decide which is the better deal for you.



Related Posts

CeMAP Course Online pop up
Update cookies preferences