Newly released plans from the Bank of England to cut the interest rate should be a great help to the conveyancing market, as thousands of prospective consumers are enticed by the chance to change their
mortgage lenders in order to find a deal which is veering on interest free.
Ensuing the March Monetary Policy Committee meeting, the Bank of England decided to cut the base interest rate in the UK for the sixth month in a row, these regular cuts have slammed interest all the way down to 0.5%. The base interest rate is now at a brand new all time low, at 0.5% in place of the 5% we were dealing with in October before the vigorous cuts commenced.
Though good news for homeowners, though many other individuals and industry groups are not particularly pleased about these base rate cuts. Many of those who have saved money are losing interest on their savings, and building societies have had to watch the capital that their customers have put away drop in value.
"Savers are being punished for the mistakes of others. And that so many are looking to find better rates at a time when you would imagine security and service would be paramount, shows just how badly savers are being squeezed," said Kevin Mountford, head of banking at a comparion site.
It is also bad news for first time buyers who were hoping to get a foot onto the property ladder according to the National Association of Estate Agents (NAEA.)
Homeowners on the other hand, are looking to experience high benefit from such cuts to the base rate. This has been backed up by industry experts who believe that as a result of such action, tens of thousands of homeowners could have the option of seeking out interest free mortgages from the beginning of next month. This is the result of more than 50,000 homeowners having taken out
tracker mortgages during the past 2 years, on which the interest they have been expected to pay is a percentage below whatever the current interest rate is. With the base rate set to be as low as 0.5%, these lucky individuals will be left paying little to nothing at all.
This news is well met by the solicitors and licensed
conveyancers out there, as they can help other individuals who want in on such savings, transfer their mortgages to something that is far more suited to the current interest rate, and the fact that it would almost seem silly not to take advantage of the current state of the market.
There are some tracker mortgage customers who will realize that they cannot benefit from this cut rate, if their lenders have applied what is knows as a collar to their mortgage rate, meaning the lender will have previously stated that a minimum payment between 1% and 4.5% only, is applicable to the mortgage rates. This would mean that only those individuals out there with tracker mortgages can really benefit from such an impressive slash in interest.
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