Despite suspicions last month that the Bank of England (BOE) was going to cut its interest rates, the 0.5% rate remained. This month, however, the BOE surprised all by halving official interest rates to 0.25%. What does this mean for those who are looking to buy a home for the first time?
If you’re looking to purchase your first home, you’ll be excited to know that fixed-rate mortgages are lower than they have ever been. There is no better time than right now to see your lender and lock in that rock-bottom rate. Another benefit of the new rate for potential home buyers is that by taking advantage of low rates now, they can enjoy lower monthly mortgage repayments for the long term.
Perhaps the best news about the interest rate drop is, again, for first-time buyers. If this is you and your deposit is 35% or more, you will be able to get a 10-year fixed rate mortgage for an incredibly low rate, something the experts are calling a “once-in-a-lifetime opportunity”.
Those who are already homeowners but who are planning to move before their term expires can also get cheaper rates by switching to a mortgage without early repayment cost fees.
Stronger Position, Plenty Of Time
First-time buyers will enjoy this new rate for many reasons, not the least of which is the chance to be in a stronger position for negotiating deals than they may have been previously. Those who are still looking for their ideal home need not worry, however; with rates as low as they are and a market that’s currently quiet, they can both take their time and enjoy less home-searching stress and place a lower bid than they were able to just two months ago.
Yet another benefit of these new rates for the first-time buyer? They have the time and the flexibility to walk away from anything they don’t consider to be a good deal.
Competitive Mortgage Prices On The Horizon
Would-be first-time homeowners who are having trouble deciding on the best buy may no longer have to sit on their hands, if experts are correct. These low rates are already inspiring mortgage providers to price competitively, which will provide some reassurance to buyers that they’re not only getting the best home to suit their requirements, but are also getting the best possible mortgage price.
More Choices For First-Time Buyers In The Future
The UK’s continuing housing shortfall means that new home demand will remain strong. When combined with the Bank of England’s interest rate cut, this means that there will be more options available for homes. Those looking to invest in their first property will find this option to be even more attractive than other asset classes.
Know What To Expect
For people who are still saving for a home or who have an existing mortgage, the best thing to do is to look at your current situation to see if there is any way the new rate cuts can benefit you. Current mortgage-holders will be contacted by their lenders and told how the cut will affect their rate and payments, if at all. Tracker mortgages already linked to the BOE base rate will see a quarter of a percent, something that hasn’t happened in quite some time.
The bottom line about the new rate cuts is that first-time home buyers will have more opportunities than ever to choose their ideal home at a very affordable rate.