Cut to Base Rate Benefits Millions of UK Borrowers
For those home owners with a floating rate, a decrease in the base rate could mean a sizeable cut in the amount they pay each month for the monthly mortgage. A total of 5m home owners fall into this category and lenders have already taken notice. Competition has been at an elevated level since the beginning of the year and the possible cut in base rate will only increase the number of lenders wanting a piece of the borrowing pie.
About half of all of Britain’s 11m borrowers are currently in fixed rate mortgage plans. The remaining half own variable rate mortgages.
For those home owners who are looking to remortgage, the timing of a cut in the base rate couldn’t be more perfect. Interest rates are already at a low point, and lowering the base rate will only make it possible for remortgagors to save even more money off the cost of the monthly mortgage payment.
Remortgaging also makes it possible to access valuable funds which are stored as home equity. These funds can make it possible to start a home renovation, pay off old debt, or possibly take a long holiday.
The process to obtain a remortgage has never been more streamlined. Completing the entire process can be done online and within days, not weeks. Lenders are even offering deals with little to no cost of administration.
David Hollingworth, director at broker London & Country Mortgages commented on the latest news of a possible cut in base rate, saying: “If base rates are cut this could well be a continuing trend.”