Mortgage Market News

What do Bank of England policies mean for your mortgage?

So what has this last month brought to the mortgage market since the announcement of post-Brexit monetary policies?

For some it could be argued that they are having the intended effect. Introduced to guard against a potential slow of lending, post Brexit, the aim of these policies is to encourage lenders to keep borrowing channels open. The additional funding to banks from the central bank reserves, along with the cut to the base rate has served to push interest rates down and encourage banks to lend.

For the next four years, the Bank of England will be implementing the Term Funding Scheme. They plan to lend anything up to £100bn to banks at favourable rates, close to the lower bank rate. Banks that increase or maintain their lending will benefit from the lowest rates1. Thus, there is a considerable incentive for banks to keep lending to households and businesses.

This came hand in hand with the Bank of England base rate cut, after which lenders were urged to pass on savings to borrowers. These events, along with the increasing competition between lenders, in an ever shrinking market, are creating lots of opportunity for borrowers looking to take out a new mortgage or to remortgage.

The National Mortgage Index for July demonstrated this well, showing that there are currently more than 23,000 mortgage products on the market. This number has not been higher since 20082. We may find that this trend will continue, as lenders continue to react to the cut in the base rate.

If you are looking to take out a mortgage, you may be asking yourself if a tracker a or fixed rate mortgage would be more suited to you. Market data has suggested that recently, mortgage borrowers have been looking on tracker mortgages more favourably, due to the cut in the base rate. However, with fierce competition between lenders, you may find that a fixed rate mortgage is more attractive3

To be sure, please call us on 020 7519 4985 or send us an email to speak to one of our Specialist Mortgage Managers, who will be happy to talk through your options with you.

  1. https://www.ft.com/content/7cc617e4-5aec-11e6-9f70-badea1b336d4
  2. https://www.cml.org.uk/news/news-and-views/market-commentary-august-2016/
  3. http://www.telegraph.co.uk/personal-banking/mortgages/stick-with-fixed-rates-borrowers-told-as-lenders-hike-tracker-mo/

Return to the Latest Market News

Our insights


We are the UK’s leading specialist in delivering innovative and bespoke financing solutions to global clients.

Reviews


Specialists in creating innovative and bespoke funding solutions.

Your home or property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. Changes in the exchange rate may increase the sterling equivalent of your debt. You may have to pay an early repayment charge to your existing lender if you remortgage. Think carefully before securing any other debts against your home.  

largemortgageloans.com is a trading name of Largemortgageloans.com Ltd, Aegon House, Ground Floor Suite, 13 Lanark Square, London, E14 9QD authorised and regulated by the Financial Conduct Authority (FCA). Our FCA registration number is 302228 and can be viewed by visiting the FCA website: www.fca.org.uk.  The FCA does not regulate tax advice or some aspects of commercial, buy to let, overseas mortgages, bridging finance, finance and asset lending.  

Largemortgageloans.com Limited is registered with the Guernsey Financial Services Commission, reference number: 2269418, as a Non-Regulated Financial Services Business.  

Largemortgageloans.com Ltd Registered in England and Wales No: 5070990 Registered Address: As above. The guidance and advice contained within the website are subject to the UK regulatory regime and is primarily targeted at UK customers. Calls may be recorded for training and monitoring.