Newspaper article The Journal (Newcastle, England)

Borrowers Set to Benefit after Bank of England Base Rate Cut

Newspaper article The Journal (Newcastle, England)

Borrowers Set to Benefit after Bank of England Base Rate Cut

Article excerpt

Byline: Vicky Robson

HOMEBUYERS will reap the rewards of the latest base rate cut as lenders scramble to compete by offering historically cheap mortgage deals say North East financial experts.

The average borrowing cost has fallen from 3.8% to 2.9% since the last bank rate cut seven years ago according to the Council of Mortgage Lenders which says there is a diverse and wide-ranging selection of mortgage products available in the market today that can have varying terms and conditions to suit borrowers' differing needs.

For example, Tesco Bank has slashed the rate on its five-year fixed mortgage, which is now priced at 2.19% until September 2021 and open to those borrowing more than PS40,000 at 60% loan-to-value, with no fee and Tesco Clubcard points for mortgage repayments.

Angela Russell, finance director of Newcastle Building Society, explained: "The 0.25% cut in base rate had been widely expected by markets and is part of a range of measures announced by the Bank of England to rebuild confidence following the vote to leave the European Union.

"This rate cut, together with other stimulus provided by the bank, means that we can expect to see mortgage rates continue to fall to further record lows, which will in turn assist our continuing drive to help first time buyers get onto the housing ladder.

"We continue to offer a range of 90%-95% loan to value mortgage products, many of which are fee-free or have other incentives such as cashback, and the significant increase we've seen in our mortgage lending over the last year reflects how these products are suiting the needs of homebuyers.

"Our Help to Buy ISA and Home Saver products are also proving very popular in giving people a structured way to save for a deposit and take advantage of the bonuses that we offer when they buy their home, and as always, we'd encourage anyone looking to buy their own property to start saving for the deposit they will need as early as they can. …

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