Despite the sharp reduction in base rate by the Bank of England from 0.75% to 0.25%, the borrowers will not get relief. The mainstream lenders/banks have increased their rates, which is sure to affect the total cost.
The significant effect of this decision is sure to show on the borrowers with the tracker rate mortgages. They were expected to have a great benefit from the fall in the base rate. However, the banks have something else in their plans. They will not keep the calmness of Bank Rate cut in the mortgage deals they provide.
HSBC has increased the rates of its fixed-term loans by 0.1%. However, the lender says that the decision has nothing to do with the change of Bank rate. It keeps the price competitive.
The property market is slow due to coronavirus prevalent across the UK. The mortgage providers are eager to compensate for their loss. The lenders with variable rates have more liberty to play with their interest rates.
In short, all the mortgage lenders with whatever rate type they offer – fixed, tracker or variable rate are giving a hint of an assured boost in the loan costs. The overall scenario of the property market gives the idea that the borrowers cannot expect any reduction on the part of the total cost of their mortgage.