The Bank of England announced that the base rate has dropped to 5.25% as expected. Moneysupermarket.com expert Kevin Mountford discusses how this will affect mortgage borrowers and savers...
Video Transcript
Hi, well, as widely reported today the Bank of England decided to reduce the base rate, so this is the 2nd reduction in only a few months, and we have gone down now to five and a quarter percent.
In many respects that's good news for borrowers, hopefully it will give some confidence to the market place now and we will start to see providers reducing some of the new products that come on to the market. So that means that that house that you've been looking for suddenly becomes a bit more affordable.
As far as savers are concerned, then I guess there is a little bit of a worry. We're seeing artificially inflated prices in the market place at the moment, and I'm just wondering whether that quarter per cent reduction will now be a trigger for some providers to reduce rates.
We've reported in the past that you've got good and bad in terms of providers in terms of how quickly they reflect these reductions and to what extent they reflect them, so I'd be having a look now at your savings provider, just to make sure that their not too quick to reflect this reduction, and clearly a quarter per cent is ok in theory but some may even decide to go a little bit further.
There's lots of really good products on the market so make sure you keep your eyes open, and if you feel as though you're not getting your just rewards in terms of those hard earned savings then move them to somewhere else.
Thank you.
