Bank of England vote to increase base rate
On 16th December, overwhelmingly, the Bank of England voted to increase the base rate. It has now gone up from the record low level of 0.1% to 0.25%. Adam Nanson, impartial mortgage broker from Your Mortgage Expert in Salisbury comments on what this means for the mortgage market.
“With inflation remaining high, it has been predicted for some time that the Bank of England would vote to increase the base rate. We were probably expecting this after the Festive Period. However, with inflation rising to 5.1% in November – its highest level since 2011 – pressure was high on the Bank of England to try and curb spending*.
“After a base rate rise, mortgage rates and pricing naturally follow. But with the Bank of England base rate increase being pretty modest our clients should not panic. Some mortgage rates have been rising steadily over the past few months**. But overall the cost of borrowing has remained relatively low.
“Most of our clients are also on fixed term deals. This means that, for the majority, the effects of the Bank of England vote to increase base rate will be minimum in the short term.
“If clients are on standard variable rate or their fixed term deal is coming to an end, we would recommend they act now to secure a new deal. The Bank of England is likely to increase the base rate slowly and steadily over the forthcoming year, so delaying is unlikely to be a wise move.
“We will, of course, be watching the markets carefully. If clients want the latest information and the most informed across market understanding, we would recommend you speak to an impartial mortgage broker like Your Mortgage Expert.”
We will take time to review your situation to establish whether you could be paying too much, whether you would save money by switching to an alternative product and whether any fees would be payable should you do so.
Searching the market yourself can be time-consuming. But with our help, we can search thousands of mortgages, including exclusive deals and lenders that you wouldn’t otherwise have access to. We have regular contact with a wide range of lenders, some of whom you may not even know exist! With our help, you won’t have to search or contact each individual lender in order to compare the mortgage terms and rates; we’ll do all that for you.
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The information contained within this article was correct at the time of publication. It is intended for information only and does not constitute advice. Your Mortgage Expert Ltd and Mortgage Advice Bureau cannot be held responsible for information that was correct at the time of publication but subsequently changes or goes out of date due to changes in legislation.