First Time Buyers Lose When Interest Rates Fall

First Time Buyers Lose When Interest Rates Fall

First time buyers lose out when interest rates fall.

Any further cuts in the UK base rate will not benefit first-time buyers or those borrowers coming out of fixed-rate deals.  Mainstream lenders have already protected themselves by increasing their tracker rates above the base rate, so if the Bank of England drops rates by 0.50 of a percentage point, they are protected.  

Trackers are still a better deal for borrowers, because interest rates are expected to fall, so lenders raised the rate to discourage new borrowers and to encourage them to take out long-term fixed-rate mortgages.

Our view

Getting on the property market is increasingly harder.  We suggest that first time buyers need to save longer and harder, just like the ‘old days’ for a deposit for their first property.

Request expert financial advice now

Purchase guidance on financial planning in the Money Shop 

Back to News Summary