Here's what Grant Nichols - Director of Start Financial Services says about today's Bank of England's increase in its base rate.
The Bank Of England raised the base rate for the 10th consecutive time today by 0.5%, taking it up to 4%, which is its highest level in over 14 years. Of the 9 Monetary Policy Committee members 7 voted to increase whilst 2 voted for it to remain the same. This will increase the cost of new tracker rates, but the good news for borrowers is that this movement has already been factored into the pricing of fixed rates. These should continue to drop over the coming weeks, as there is the sentiment that the base rate might now have peaked and that inflation should now start to drop, which can then lead to the base rate coming back down. Tracker rates have been very popular in recent months due to the difference in cost to fixed but this gap has narrowed and fixed rates are now looking much more attractive. Any existing mortgage holders who have a deal which is linked to the base rate will of course now see their payments increase. With all these changes happening It’s a great time to review your mortgage options whether you are in the market to buy or are an existing mortgage holder.
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