Many homeowners won't benefit from rate cut

Posted: 16 Jan 2009 10:05:32 GMT

The historic cut in the Bank of England base rates last week will not benefit the majority of homeowners, recent research from finance website Fairinvestment.co.uk has found.

Despite the Monetary Policy Committee setting base rates at just 1.5 per cent, 52 per cent of homeowners won't benefit as they are on fixed mortgage deals, the website has stated.

The deals mean that, for many, the threat of repossession will remain in 2009, as repayments will stay high for most of the population.

Fairinvestment.co.uk's chartered financial planner, Sharon Bratley, suggested that instead of benefiting existing homeowners, the base rate cuts will instead benefit those buying property.

"Lenders are also beginning to reduce the rates on new fixed rate mortgage rates, so for people who prefer the security attached to a fixed rate, it is certainly worth shopping around and comparing a number of deals when one deal comes to an end," she said.

Selling a property, to avoid repossession or to downsize to avoid negative equity, could be made easier by making a home available online; a move which could attract a greater number of buyers and as such a higher price.



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