Other Posts by Michael Aglony

• So what's next after Base Rate is held at 0.5% again?
• Data indicates property market progress!
• Improved Funding for landlords
• At last - Funding for HMOs, Freehold Conversions & Limited Companies returns! 23.07.2009
• Increase in fixed rates as "perceived" inflationary pressures start to build. 22.06.2009
• Survey's report increases in house prices - 15.05.2009
• Base Rate stays at 0.5% for a second month - 07.05.2009
• Base Rate remains unchanged at 0.5% - 09.04.2009
• As the market bottoms out, now is the time to secure that property bargain - 03.04.2009
• The Turner Review may impact Buy to Let warns Lord Turner
• Northern Rock resumes lending - what will be its impact?
• Will everyone benefit from the 0.5% Base Rate cut?
• Bank Base Rate now seems set for 0.5% cut on Thursday
• B&B appoint Mortgages for Business for early repayment charge clients
• It looks like Bank of England Base Rate could drop to 1% next week
• Will Base Rate stay below 5% in 2009?
• It's all about cashflow!
• Mortgage Express are waiving all Early Repayment Charges!
• SWAP rates and LIBOR rates on the move in 2009 - 13.01.2009
• Bank of England Base Rate cut by 0.5%. How will this effect Buy to Let? - 08.01.2009
• Market awaits Year End movements at Banks
• Merry Christmas and here's to a better 2009!
• 3 month LIBOR continues to ease slowly - 16.12.2008
• LIBOR, SWAP rates, base rate and interest rates - we're seeing history being made - 11.12.2008
• Base Rate reduced to 2%
• The return of Buy to Let as a commercial transaction

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Now that Base rate has dropped to 0.5% it's time to fix!

By Michael Aglony

This will of course continue to improve the cash-flow of those borrowers on Base Rate linked loans (without collars!) but unlikely to have much of an affect on new mortgage products.

Only a 3rd of lenders passed on any of last month's 0.5% cut and I would expect even fewer lenders to act this month. That said, there are a handful of lenders (C & G, Nationwide, Skipton & Halifax) who have Standard Variable Rates (SVRs) that must never be more than a set percentage above Base Rate - they will have no option but to reduce their SVRs. For the rest, don't expect much movement and for those of you looking to move house or remortgage, I would reiterate that the products available now are probably as good as they are going to get and if you are looking for fixed rate mortgages for your home or Buy to Let fixed rate mortgages over the next 2, 3 or 5 years then now is certainly the time to act.

The additional announcement that the BoE will embark upon £75Bn of asset purchases financed by the issuance of central bank reserves is a welcome move in terms of trying to improve liquidity. Perhaps the most significant phrase in the published statement was "in the first instance" thus demonstrating the BoE's commitment to stimulate the economy with a series of measures if necessary.

None of this will change the economy and, in particular, the housing market overnight but these are alll essential building blocks on the way to recovery.

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