The decision by the Bank of England’s Monetary Committee to keep the base rate on hold at 0.5% for the sixteenth month running came as no surprise following last month’s emergency budget.
“Even though one of the new members of the Bank of England’s Monetary Policy Committee voted to increase rates at its June meeting, this view seems unlikely to prevail for some time,” says Simon Gammon, head of Knight Frank Finance, which specialises in mortgages over £1m.
“George Osborne’s budget got a largely positive response from the City and the consensus is that it could push any rate increase further into the future. Five-year swap rates have dropped to around 2.5% suggesting the market is not pricing in an imminent future increase” adds Gammon.
Even if rates seem unlikely to change for the next six months it is worth keeping in close contact with your mortgage adviser, he suggests. “There have been some very competitive five-year fixes on the market recently, some below 4%, but these are getting withdrawn very quickly as demand exceeds supply.”
“If you are thinking about taking a new mortgage or renewing your existing arrangements at the current time it could pay to talk to an expert so you are ready to move quickly to secure the best rate.”