Bank Rate holds for the first time in almost two years at 5.25%!

The Bank of England has voted to hold interest rates at 5.25% offering some much-needed relief to mortgage borrowers.

This is the first time since November 2021 the central bank’s Monetary Policy Committee has not raised the base rate. There have been, up to today, 14 consecutive hikes to the rate. It also comes just a day after an unexpected dip in inflation, which is now at 6.7%, and as mortgage lenders have been slashing rates – with some deals coming in at below 5%.

What’s the impact on your mortgage?

For those on tracker mortgages, whose repayments are aligned with the Bank of England base rate, this is good news. For those remortgaging to new deals whilst rates are still currently high, incomparison to those on offer 12 months ago, this may be a signal that rates have peaked and will now slowly begin to fall back.

About to exit your current deal?

For anyone nearing the end of their current fixed deal we recommend you look at your options as soon as possible. You can often secure a new deal anywhere from twelve to six months in advance of the mortgage start date. Even if rates continue to fall, Prospect will monitor your mortgage deal for you to ensure that you benefit from the lowest rate possible.

What if you are worried about the high cost of your repayments?

Although today’s news is certainly positive, for most households the cost-of-living pressures persist. If you are worried about the high cost of your mortgage there is support at hand and practical tools at your disposal to help you. A number of mortgage lenders have signed up to the Mortgage Charter, which obliges them to offer solutions to borrowers who feel they may not be able to keep up repayments.

They can offer an interest-only option for six months, which will lower repayments for a short period, or you can arrange to extend your mortgage term. These are not subject to affordability checks, nor will this impact your credit score.

The first step to taking control if you feel overwhelmed is to speak to Prospect. There are no fees or obligation to arranging an appointment with us. It is much better to have a conversation to look at available support options before you find yourself with any mortgage arrears.

Reference – www.whatmortgage.co.uk