What changes have there been to interest rates since the base rate was reduced to 3 %? - 18.11.2008

Author: Michael Aglony Posted on: 18 November 2008

It’s been nearly 3 weeks since the Bank of England made a shock reduction of 1.5% to the Bank Base rate, taking it to an all time low of 3%

So what have lenders done since this change?

The initial response from lenders was a mass withdrawal of tracker rate residential mortgages leaving only fixed rate mortgages available on the market. They then held fire for a few days with no changes to fixed rate mortgages and no new tracker rates, while they waited for the Libor rate to come down as the difference between Libor and the base rate was huge after the 1.5% reduction.

Libor has since started to reduce and is today showing at 4.15%, this has now inspired lenders to reduce their fixed rate mortgages and bring back tracker rates. Today we have seen the launch of a new 2 Year fixed rate at 3.99% which is the best on the market at the moment. With regards to tracker mortgages lenders are being much slower in bringing these back to the market however we currently have one at 1.39% above the Bank Base rate giving a current rate of 4.39%

Hopefully this is the start of things to come, as long as Libor continues to reduce we will start seeing lenders launching more competitive fixed and tracker mortgages.

Please do not hesitate to contact us and we will be more than happy to update on any new interest rates.