There’s nothing like an interest rate cut to get people to sit up and take notice (not that people aren’t already on high alert following the daily stream of news surrounding Coronavirus).
However, an interest rate cut does generally signify some kind of issue. Or, at the very least, provides a signal that something isn’t as it should be.
It’s also quite polarising. On the one hand, you have savers – possibly even those who’ve paid their mortgage off – who will have rolled their eyes at the fact that their savings are no longer earning as much money as they were only a few days ago.
This also applies to those who’ve recently entered fixed rate mortgage deals, who are likely to experience a period whereby they’re potentially paying more than they would have on non-fixed mortgage deals.
On the other hand, there are those on tracker mortgages who will no doubt welcome a period of cheaper monthly mortgage payments.
Either way, the link between Coronavirus and mortgages is certainly being felt – and not just by homeowners, either. As a team of Guildford mortgage brokers, we are adjusting and adapting our approach to mortgage applications on a daily basis, too.
Negative points aside, and without trying to sound too opportunistic, Coronavirus does present an opportunity for those applying for a mortgage or who are thinking about remortgaging.
As the Bank of England’s interest rate has been cut from 0.75% to 0.25%, lenders are now likely to reduce their mortgage rates, too. Complete Mortgages predicts that any reduction by lenders isn’t going to reflect the entire 0.50% base rate cut, but probably somewhere in the region of 0.10% instead. Of course, rates may not drop at all and this, in part, depends on how long the Coronavirus lasts and how widely felt its impact is.
However, just as those keeping a keen eye on the stock market are waiting to buy back in at the right time, our advice would be to keep in touch with your Guildford mortgage adviser (and by that we mean us) to find out just how low fixed rate mortgages go before committing to a 2, 5 or even 10 year fixed rate mortgage.
For the latest mortgage advice and Coronavirus mortgage updates contact the team on 01483 238280 or email firstname.lastname@example.org.
Note: those currently in the mortgage application process with Complete Mortgages should not be concerned about disruption of service. All of the team are ready and fully equipped to work from home should that become necessary.