UK Interest Rates Cut to 0.25% - What Does This Mean for You?

Posted on September 13, 2016

Life post Brexit has been filled with rumours, scaremongering and shocking predictions regarding us entering a new recession, and whilst the future is no doubt an uncertain one, with the ripple effect of our EU exit affecting multiple market sectors, much is being done by the Bank of England (BoE) to ensure that any impact felt has minimal negative effects.

The latest measure introduced is the cutting of UK interest rates, which have been slashed dramatically from 0.5% to 0.25%. The cut is the first of its kind since 2009 and represents a new record low, but why does the Bank of England deem it necessary? And what effect will it have on tenants, homeowners and property purchasers like you? As a leading estate agent in Sunderland we’ve made it our mission to find out…

Post Brexit measures

The interest rate cut isn’t the only tactic being used by the Bank of England to cushion the blow as we negotiate the terms of our exit from the European Union. In addition to the new, record low interest rates, the BoE has indicated that further cuts to rates could be made if the economy does take a turn for the worst. To stimulate growth within the economy further banks will be forced to pass on this low interest rate to households and businesses, which means savings for you.

Good news for mortgages and savers?

The cut does mean savings can harnessed but as usual there are some negatives. The new 0.25% rate will save the average homeowner £22 a month on their mortgage, however those with pricier properties may reap more rewards due to automatic tracking. The rate will also make affording a mortgage easier and as a result getting onto the property ladder more accessible than ever thanks to these monthly savings, so now could be the perfect time to enquire at a Sunderland estate agency like ourselves.

Whilst there is some good news for homeowners and homebuyers, the new rate will mean less annual interest when it comes to your savings. For example, those with a savings pot of £10,000 will earn £25 less in interest during this period.

If you are thinking of buying or renting a property of your own, our Sunderland estate agents can assist with the latest market knowledge and an extensive property portfolio to boot. Contact us today for further help and advice.