The big news in the financial press this weekend was the IMF’s recent call for the Bank of England to drop its interest rate in order to prevent the economy from stagnating. Experts warned in the Sunday Times and Mail on Sunday however that many borrowers on tracker mortgages wouldn’t actually benefit from any cuts in base rate due to minimum (or collar) rates applied to their deals by lenders. Anyone currently on a Standard Variable Rate is also unlikely to see their payments drop, and may have in fact seen them rise in recent months. Brokers suggested in the Financial Times that, with lenders currently increasing rates and tightening criteria, it would be unwise to wait for a base rate cut to turn things round. Anyone coming to the end of their current deal is urged to think about remortgaging and taking a longer term product to avoid having to change deals again when rates are higher.
What the papers say – 26th – 27th May 2012