Late last week the Bank of England announced that the base interest rate will be cut by 0.25 to 4.75%

Good news for the property market!

What Does This Mean?

The Bank of England’s base rate heavily influences the interest rates lenders charge for mortgages, loans, and other types of credit. With this rate cut, borrowing money may become more affordable.

How Does This Affect You?

Let’s explore how this could impact people in different situations:

Thinking of Buying a Home?

Following the rate cut, you may see more competitive mortgage rates. If you haven’t already, now’s a good time to speak with an independent mortgage advisor (we’re happy to recommend one).

Thinking of Selling a Property?

Lower interest rates often boost buyer confidence, with more affordable mortgages encouraging faster decision-making. As rates fall, buyers may act quickly, which can accelerate the selling process.

Already Have a Mortgage?

Depending on your mortgage type, here’s what to expect:

Tracker Mortgages: These follow the base rate directly, so any change in the base rate typically means a corresponding change in your mortgage rate.

Fixed-Rate Mortgages: Your rate remains the same for a fixed period, unaffected by base rate changes. However, when it’s time to remortgage, new rates could vary, which might offer benefits depending on your current deal.

Standard Variable Rate (SVR) or Discount Mortgages: Discount mortgages are tied to the lender’s SVR, which is often influenced by the base rate. This means you may see adjustments to your rate in response to the base rate cut.

Are You a Property Investor?

Interest rate cuts usually create a favourable environment for investing by reducing borrowing costs. Balancing your strategy to avoid over-leveraging while planning for future rate shifts can help you make the most of current offers while safeguarding your investments. Seeking expert advice is highly recommended.

Impact on the Property Market

While no one can predict the future with certainty, rate cuts often stimulate activity among buyers, sellers, and investors. Many analysts predict this downward trend may continue, further boosting buyer confidence.

What’s Next?

The next Bank of England announcement on interest rates is scheduled for Thursday, December 19. Could it bring more good news for property seekers and investors?