Bank of England Drops Bank Rate To 0.10% & What This Means For You
March 19, 2020, will go down in history for many reasons, including the news that the Bank of England has further dropped their base rate from 0.25% to 0.10%, the lowest rate in the bank’s 325-year history, as an emergency measure to support the UK economy in the wake of the recent outbreak of COVID-19 (Coronavirus).
This announcement comes as the second cut in interest rates in just over a week, having initially reduced the rate from 0.75% to 0.25% just a few days ago.
This monumental decision was made at the Bank’s Monetary Policy Committee by newly appointed Bank of England governor, Andrew Bailey, who took over from his predecessor, Mark Carney, only four days prior.
But What Does This All Mean For You As A Landlord?
Well, it is true that some mortgages may change and even get cheaper but this will depend on the specific type of mortgage you have. For example:
- Tracker – if you are currently on a tracker Buy to Let mortgage – this is a type of mortgage that fluctuates inline with the base rate – therefore you should see your monthly payments reduced further until the base rate is due for another review on March 26.
- Variable – if you have any properties on what is known as a Variable Rate mortgage, you may also see a reduction in your monthly payments but this will depend on your lender and the decisions they may regards setting their own rates. You can contact one of our team on 0800 949 9410 to discuss this further.
- Fixed – if you are on any type of fixed mortgage, you will not see any changes at all as your monthly payments will continue at the agreed rate for your initial period.
You may want to consider switching to a better rate with a Buy to Let Remortgage should you be eligible to do so, just be conscious of whether you have any penalties to exit your current deal.
That is just three types of mortgages but if you have any questions about your own terms or how the base rate change will impact your monthly payments, get in touch with one of the team on 0800 949 9410 to discuss the full details.
All That Being Said, There Are Other Important Factors To Consider
With all of the current uncertainty in both the financial market and the world as a whole, none of us knows what will happen in the coming months. Ever looking to protect our clients, we are working closely with all of the lenders and regulatory bodies to monitor the situation daily and provide the most up to date advice.
It is vital that all landlords review their current financial situation right now to quickly identify both any risks and also any potential opportunities as they arise. To help with this, we are offering a full portfolio review for all landlords, giving expert advice on the most effective ways for each landlord to strengthen their portfolios or raise capital quickly should they need it.