Rate boost may be on the cards for people with first time buyer mortgages

People taking out first-time buyer mortgages will be boosted by big reductions in interest rates over the coming months.

That is according to Capital Economics, which said that it anticipates seeing rates reduced to 3.5 per cent.

It comes as inter-bank lending rates remain high despite recent reductions to the base rate of interest.

People looking for first-time buyer mortgages will be particularly pleased with the news and will be hoping that the rate cuts are passed on to them.

Capital Economics released a statement, detailing that it expects the Bank of England to take action very soon.

"The Bank of England is likely soon to announce more initiatives to help solve the problems in the financial markets, while at the same time continue to use monetary policy to protect the wider economy," it read.

"We think that interest rates will eventually fall to around 3.5 per cent," continued the statement.

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