From This is Money:
The relief would come if, as expected, the Bank of England cuts interest rates and mortgage lenders follow suit.
The Bank is widely expected to cut rates several times in the next year. If the base rate falls by one percentage point to 4%, it is thought that mortgage rates will drop too.
For those with a £250,000 loan, not uncommon in the South, a one percentage point drop would save about £2,000 a year.
For homeowners with a typical loan of £138,000, the saving would be about £1,300 a year.
Ray Boulger, senior technical manager at the mortgage broker John Charcol, said he expects interest rates to ‘fall significantly over the next year’. And the consultancy Capital Economics predicts they could drop to 3.5% next year.
In the last week, many banks and building societies, including Abbey, Lloyds TSB and Halifax, have cut their loan rates – even though the Bank has held interest rates at 5 per cent.
For some lenders, such as Cheltenham- Gloucester,…
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