At noon today the Bank of England will announce their decision on interest rates & it is widely expected base rates will fall to a new all time low. Base rate is currently 1% and it is expected to fall to 0.5%. Bad news for savers but yet more good news for anyone on a tracker mortgage.

For anyone thinking of getting a base rate tracker mortgage it may be too late for the benefit. With rates so low there’s really only one way rates can go in the short to medium term. Therefore anyone with a tracker mortgage may well see increases towards the end of the year.

A number of lenders are now introducing ways to protect a borrower from increasing rates. Some are putting a cap on their base rate tracker, whereby even if rates rise there is a limit above which the borrower will not have that increase passed on by way of higher monthly charges. The lender will suffer the cost. Other lenders give the option to transfer to a fixed rate during the tie in period of the base rate tracker without paying a penalty.

To help with your decision do take proper financial advice from an independent adviser.

For mortgage advice please see www.marywaringmortgageadvice.co.uk

This entry was posted on Thursday, March 5th, 2009 at 11:43 am and is filed under interest rates, mortgages. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.