Mar 11, 2020
Budget 2020: Borrowers to benefit from UK interest rate cut
Borrowers will benefit from the Bank of England's emergency cut in interest rates on Budget day in response to the "Economic shock" of coronavirus outbreak - but savers will lose out. Barclays said on Wednesday that new rates for tracker and variable rate borrowers would come into effect from April 1. Using the example of a borrower with a £200,000 repayment mortgage over 25 years with a standard variable rate deal of 5 per cent, a half-point rate cut would reduce monthly payments from £1,169 to £1,111 - a difference of £690 per year - according to estimates by broker L&C Mortgages. Ms Springall expected the base rate reduction to be passed on in full to savers over the next few months and recommended savers to shop around for the best rate - however paltry that might be. "As we have seen time and time again, the biggest high street banks are unlikely to match the base rate - let alone beat it, so this cut is the perfect excuse to pay out less in interest to consumers," she added.
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