The Bank of England’s decision to cut rates to 3.75% could open new opportunities for prospective homeowners, current homeowners and those looking to remortgage.
What does this drop mean for prospective homeowners?
Lower interest rates means that the cost of borrowing cheaper, reducing monthly mortgage payments and making home ownership more appealing for first-time buyers.
Although this is a positive, some lenders may still be cautious. Factors such as affordability checks, credit history, and market uncertainty can influence lending decisions, so it is still important you are prepared in advance to present yourself as a reliable borrower.
It’s also important to factor in all costs – initial fees such as your deposit, solicitor charges, and other expenses should be factored in to ensure your financial stability. Read our guide to buying your first home here.
What does this drop mean for those on fixed, variable or tracker mortgages?
For those on variable or tracker mortgages this change should take effect immediately and you’ll notice a reduction in your monthly rates from January onwards.
For those with fixed rate mortgages, whether you are looking for your first home or your fixed rate is coming to an end, you should start to see these rates coming down.
What does this drop mean for those looking to remortgage?
For those looking to remortgage, the interest rate drop could lower monthly costs compared to previous deals. If you are currently on a variable or tracker mortgage, now could be a good time to switch to a fixed rate in order to secure your finances and ensure the stability. However, it’s worth noting that rates could fall further in the next six months, so timing and careful consideration are key.
If you’re planning a home renovation or want to release equity for other purposes such as funding education or making a major purchase, now could be an ideal time to remortgage. Lower interest rates can make borrowing more affordable, helping you access the funds you need while keeping monthly repayments manageable.
Get in touch
With the constantly evolving interest rate landscape, it can be challenging to know which option is best for your circumstances.
At PM+M, our expert mortgage director, Mark Chadwick, can offer you tailored recommendations on the most suitable mortgage products based on your circumstances and the latest rate developments.
For further advice and to explore your options, please contact Mark Chadwick by clicking the button below.
PM&M Mortgages Ltd is an Appointed Representative of The Right Mortgage Ltd, which is authorised and regulated by the Financial Conduct Authority.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
