Bank of England holds base rate
Thursday 21 September, 2023
The Bank of England has surprised markets by holding the base rate at 5.25%. This comes after 14 consecutive rate increases, and it is the first time the base rate has been held since March 2022.
Inflation figures for August showed a surprise reduction to 6.7%, which is lower than many economists had expected. However, some economists believe that higher interest rates will still be needed to bring inflation back down to the Bank of England's 2% target.
While the base rate has been held for now, the pressure on mortgages continues. Mortgage rates are unlikely to come down in the shorter term, but it is important to speak to a professional mortgage adviser when you are in a position to renew your mortgage.
If your mortgage has 6 months until the deal ends, you should start your search for a new mortgage now. Deals that have been agreed in principle can be held for 6 months, which gives you time to assess the mortgage market and monitor any changes. This could mean that you are able to secure a better deal when the time comes to renew your mortgage.
Tracy Dove, a financial consultant and mortgage broker, Exeter and Basildon, said:
"With the Bank of England holding interest rates, we are yet to see the impact on mortgage deal rates. The speculation is that we are likely to continue to have high mortgage interest rates for the foreseeable future. Despite this better news and the fact that another rate rise didn't materialise, those currently on a fixed-rate mortgage that is coming to the end of the deal should still take action now. We urge them to speak with a professional mortgage broker for advice as soon as possible."
Tracy continued:
"We also recommend that if you have been affected by the higher mortgage rate and are beginning to struggle with repayments, then you should give us a call straight away. You can discuss your specific financial situation with one of our professional mortgage advisers."
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
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Some Buy to Let mortgages and Commercial mortgages are not regulated by the Financial Conduct Authority.
