The Negative Impacts Of Mortgage Interest Rates

Written by Sapphire Savvy Women Group.


The negative impacts of Mortgage Interest Rates.

At this point in time people are becoming aware of negative interest rates affecting their investments. But do we really understand what they are doing to our finances?


 What does it do to your assets?

In terms of interest rates, inflation will be the most significant factor. This can creep up to your future investments and affect them greatly especially in this upcoming year. The MPC didn’t want to give the wrong impression that a negative bank rate is coming, but it wanted people to be aware that it is a possibility and to be prepared.

If a lender offered a 1% interest rate on top of the 0.1% base rate, the borrower’s mortgage rate would be 1.1%. The rate on the tracker mortgage would be 0.75% if the base rate fell to minus 0.25%. This information can be found at The Times Money Mentor.


How does this affect homeowners?

Property owners can expect that their mortgage rates will increase considerably due to this. In fact, they might even have difficulty making their mortgage payments and those who make their payments without being under pressure might make it through the market decline.

Many homeowners are left wondering what they should do in this situation, and it all relies on whether the owner can make their monthly mortgage payments or not due to being pressured by the national lockdowns.


Can Negative Interest rates cause you to lose money?

Having a negative rate on your savings account would mean that you’d be paying the bank or building society to keep your money. Banks and building societies are unlikely to follow bank rate cuts down to zero, even if the Bank of England does so. You will lose money if your interest rate is lower than inflation if your interest rate is lower than inflation. They may reduce rates, but probably not to negative levels. More information like this can be found here.



The National Negative Mortgage rate will affect people with past investments interest, it then will be added to future home purchases. In the other it can also be the opposite of a threat for people that have added up interests but can still afford to make their monthly payments despite a change in the economic situation.


Through the steps in this blog, and by the way we do have helpful articles for this, just click here. It is so beneficial to be aware of where you can find the trends and statistics regarding property.


The Finance Talk – blog, posts weekly on Monday’s, where you can get the latest exclusives on what’s occurring in the housing market. As professional property investors and Educators, we make it our job to know the property business -so check on in and we have you covered.


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