The Bank of England has recently written to all banks and building societies to check whether they could pass on negative interest rates if the bank cut the current base rate of 0.1%.
According to the chairman of Natwest Howard Davies, Britain’s banks are not ready for negative interest rates, with technical and contractual issues aplenty.
The Bank of England governor, Andrew Bailey, also stated that he did not know whether high street bank computer systems could cope with minus figures.
But the main highlight for those who are looking to buy a house, remortgage or switch rate need to know that a negative interest rate doesn’t automatically translate to mortgage rates of similar levels.
Is your mortgage rate due to expire?
Mortgage rates are currently low, but it does look like they could be increasing. In fact figures published by the latest Moneyfacts UK Mortgage Trends Treasury Report show that some mortgage rates have increased for the third consecutive month*.
Homeowners looking to remortgage should speak to a mortgage broker who will be able to provide information and advice on the best options available for individual circumstances.