Does my mortgage rate go down if interest rates are cut?

Question

Sorry to ask the shocking stupid question! I am coming to the end of my mortgage term ( end of September) and am wandering if the mortgage rates will go down (currently for at 6.99%). Do you think it will go down by this time? I am in the UK.

Answer 1

If your rate was artificially low, it will go up even if rates in general go down.  Otherwise it will follow the market. /

Answer 2

Yes they might do. They definitely will not go up. If I knew the definitive answer I could make a lot of money!

Basically the UK economy is showing negative growth and although inflation his running high (5%) the BoE could reduce rates to stimulate the economy. If they raised rates it would have a disastrous effect.

Answer 3

Get your mortgage, and see how the mortgage rate will be based.  For example, if it is LIBOR, plus a margin, then calculate what it would be today. You can also call your current lender, and ask them what the anticipated rate is. Rates are not expected to increase between now and September.

If the rate is going to increase, then I suggest that you begin the process of applying for a fixed mortgage.  You can settle when the new mortgage rate was scheduled to begin.  To give you an idea fo what to look for, our rates for 30 year fixed are now about 6.375%.  I do not do loans in UK, so do not think this is a solicitation to apply with me.     Good luck!

Answer 4

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Answer 5

I'm looking at getting a new mortgage in september. My advisor told me they had gone down .1% in the last few months they are likely to fall again. The cheapest I can find at the mo is 6.5% - first direct.

Answer 6

In the US, only if it's an adjustable rate mortgage (ARM). It jumps from some ridiculously low rate up 4 or 5 points. People are losing their houses, they can't afford the new payments.

Glad I got my 20-year fixed.