With the UK now in its sixth week of lockdown in order to slow the spread of the coronavirus (COVID-19) crisis, millions have begun to feel the financial impact of the pandemic. During these unprecedented times, Martin Lewis, the founder of Money Saving Expert, has been frequently sharing his personal finance expertise via a number of broadcasting channels, including his ITV show The Martin Lewis Money Show.
- Martin Lewis offers ‘last chance’ advice on savings accounts
This evening, Mr Lewis was asked a question about mortgages.
It came after the Bank of England made successive cuts to the Base Rate in March, in response to the pandemic.
Having been cut from 0.75 to 0.25, the second reduction means it is now 0.1.
While this has meant a cut in some interest rates for savers, it could be good news for some homeowners who have a variable rate mortgage.
This evening, an ITV viewer explained that they’re on a tracker mortgage, and they wondered whether now would be a good time to get a fixed mortgage deal.
Mr Lewis replied: “Well, it depends on your tracker rate. If you’ve got an amazingly cheap historic tracker rate probably not.
“But, for most people on trackers, remember the UK Base Rate is at 0.1 percent. It hasn’t got much room to fall. But, it could go up quite a lot.”
However, that’s not to say that interest rates couldn’t drop further, as he pointed out.
“I mean, interest rates could go negative – it’s happened in one or two countries over the last 100 years,” he said.
Mr Lewis went on to address fixed rate mortgage deals, however he pointed out some important factors to consider – such as equity in the property and credit scores.
He said: “Fixed rates are very cheap, you have to have decent equity in your house because they’ve made the criteria for getting cheap fixes a little bit more difficult, and a decent credit score. But, fixed rates are very cheap.
“If you could fix now for less than you’re paying on your tracker, that would certainly be worth looking at.
- Mortgage expert explains optimism about property market
“So, I’d go and do a comparison online and also speak to a mortgage broker about what the best you can get is. It is a very good time if you’ve got decent equity to be looking at getting a new mortgage deal.”
Elsewhere during the show, Mr Lewis reminded viewers that the deadline to apply for the five percent interest rates currently available via the Nationwide FlexDirect account is midnight tonight.
He said: “Five percent fixed savings. If you apply before midnight, it will last a year and it’s on up to £2,500.
“Now, this is part of a current account, the Nationwide FlexDirect, so it’s switching bank accounts. You need to meet its minimum pay-in criteria which is £1,000 a month so earning £12,000 a year, just having that paying in.”
Mr Lewis continued: “If you want five percent savings, it’s not on the hugest amount, but still, nothing else close to it on the market.
“Top easy access – 1.2 percent with Marcus and Saga,” he said.
The Martin Lewis Money Show – A Coronavirus Special continues next Thursday on ITV at 8.02pm.
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