Interest rate drop a double edged sword, says Uswitch
Commenting on the Bank of England’s decision to lower its base rate to 0.25%, Tashema Jackson, money expert at Uswitch.com, says: “The lowering of the Bank of England base rate to a historic low of 0.25% is a double-edged sword for consumers.
“The good news for homeowners on a tracker rate mortgage is that lower interest rates should mean their repayments will decrease in the immediate future. However, it remains to be seen if the banks will pass the benefit of lower rates on to other mortgage customers.
“Most of the best savings accounts have already vanished from the market, as the banks look to mitigate any potential losses, and we may see a freeze on mortgage and loan rates to prevent the cut to the base rate eating into profits.
“It would be incredibly disappointing if borrowers weren’t to benefit from the cut in interest rates – so for anyone looking to borrow from a bank, shop around to find the best rate for your individual circumstances. When choosing a mortgage or a loan it’s important to remember that the lowest headline rate isn’t necessarily the cheapest in the long run.”
Find out how you could save over £1,000 a year with Uswitch here.
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