The base rate cut, what does it mean for you?

The base rate cut, what does it mean for you? The recent unanimous decision by the Bank of England (BoE) Monetary Policy Committee to reduce the base rate by 0.25% was the first time we have seen the rate change since 2009.  The move is designed to add extra stimulus to the UK economy whilst it adjusts to the prospect of a future outside the European Union. The cut in the bank rate should lower borrowing costs for households and businesses.  However, as interest rates are close to zero the BoE has suggested it may be difficult for some banks and building societies to reduce deposit rates much further, which, in turn, might limit their ability to cut their lending rates.  That’s why there are a number of additional measures being put in place to help this rate cut get passed on to those already borrowing money or looking to fund future purchases. So what does it mean for you and your mortgage?  If you are currently on a tracker mortgage which follows the Bank of England Base Rate, you’ll see a fall in your mortgage payment which will most likely be reflected in your September payment or earlier, depending on your direct debit date. For those on a fixed rate, you won’t see an impact on your monthly payment until you come to the end of the introductory rate, and then your payments will depend on the rate you move to, whether your lender has decided to pass on the rate cut, and that the Bank of England base rate remains at its current record low level. Mortgage holders on a standard variable rate’ (SVR) will need to look out for news from their lender on whether they will see the rate come down.  Remember a base rate cut does not automatically mean that the lender will give you a reduction in your monthly payment. Since the lending crisis of 2009, many lenders have removed the link between their SVR and the bank base rate, and now use a separate internal index to set their rates. If you are on your lender’s SVR, there has never been a better time to have a look at your mortgage payments and see how much money you are losing each month by not reviewing how much you pay against the rates available in the mortgage market today.  It doesn’t take long to see if you can remortgage to a more competitive deal and, with a little help from us, you can start to see your monthly payments reduce, giving you the full benefit of today’s current record low interest rates. You can contact us at any time if you have any questions on the base rate change, or if you would like an informal conversation about how you can take advantage of the low interest rates available at the moment. Remember: if you are on an SVR, chances are you can save money each month and if you are coming to the end of a fixed rate deal then don’t let inactivity push your payments up. We look forward to hearing from you so we can show you just how easy it can be to make a saving on your mortgage. (August, 2016) For mortgage advice and to find the right solution for you, please email us or call +44 (0) 20 3858 0313.


Max Adams Ltd is an Appointed Representative of HL Partnership Limited, which is authorised and regulated by the Financial Conduct Authority. The Financial Conduct Authority does not regulate some forms of buy to let, offshore mortgages, commercial loans or bridging loans. Your home may be repossessed if you do not keep up repayments on your mortgage. We do not charge a fee for residential mortgage advice. We charge an administrative fee for processing each of your mortgage contracts; our fees only apply when you decide to go ahead with an application. Standard residential and buy to let high street mortgages. The highest fee is up to £999, payable on application.

Private Bank and specialist mortgages The highest fee of 1% of the mortgage loan size applies of which £999 is payable on application with the balance payable on completion. Max Adams Ltd is a company registered in England and Wales with company number 7952988. Registered office: Brick House, 150a Station Road Woburn Sands, Milton Keynes, England, MK17 8SG. The information contained within this website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK. You voluntarily choose to provide personal details to us via this website. Personal information will be treated as confidential by us and held in accordance with the Data Protection Act 1998. You agree that such personal information may be used to provide you with details of services and products in writing, by email or by telephone.

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