The interest rate cut from the Bank of England today has been hailed as postive news for homeowners and those looking to enter the property market by a Northern Irish mortgage advisor.
The Bank of England cut interest rates by .25% on Thursday, February 6, reducing the base rate from a 4.75% to 4.5% in what is the third reduction in the past six months.
The base rate helps dictate how expensive it is to take out a mortgage or a loan, while it also influences the interest rates offered by banks on savings accounts. Prime Minister Sir Keir Starmer said the move would give people “more money in their pockets."
Read more: DWP benefits set to increase in April and here's exactly how much you'll get
Tanya Martin, Financial Planner and Managing Director at Mortgage IQ said the cut will be positive news for homeowners and buyers, with banks have already beginning to reduce their fixed rate deals.
She also warned those looking to move house or purchase on of the upcoming changes to stamp duty on April 1, which will mean an increase in costs and reduction in relief for first time buyers.
She said: "The Bank of England has recently reduced the base interest rate from 4.75% to 4.5%, marking the third reduction in six months. This move brings positive news for homeowners, those looking to move, and individuals aiming to enter the property market.
"If you have a tracker mortgage, which directly follows the base rate, you should see an immediate decrease in your monthly repayments. Similarly, borrowers with standard variable rate (SVR) mortgages may also experience rate reductions, though the extent and timing will depend on individual lenders' decisions.
"In anticipation of this rate cut, many lenders, including Lloyds, Barclays, HSBC, Coventry Building Society, and TSB, have proactively reduced their fixed-rate offerings. This trend is expected to continue in the coming weeks as other lenders follow suit.
"If you're currently locked into a fixed-rate mortgage, your repayments will remain unchanged, and exiting your existing deal may incur early repayment charges. However, if your fixed-rate term is nearing its end, now could be an opportune time to secure a new deal before transitioning to your lender's standard variable rate.
"For savers, it's important to note that while borrowing costs are decreasing, interest returns on savings accounts may also decline as banks adjust their rates accordingly.
"Looking ahead, the Bank of England has indicated that it will consider further rate cuts but will adopt a "gradual and careful approach" as “we live in an uncertain world.”
"Another important date to remember for those moving or buying is 1st April. The new stamp duty changes are coming into effect. The changes will mean higher costs with a reduction to the nil-rate threshold and first time buyer relief.
"For borrowers, this development is particularly encouraging for Northern Ireland, where the housing market is already thriving. As the financial landscape continues to evolve, staying informed and seeking professional guidance can help you make the most of these changes. For personalized advice, visit www.mortgageiq.co.uk or contact us at 02890428000 with any queries."
For all the latest news, visit the Belfast Live homepage here and sign up to our daily newsletter here.
English (United States) ·