Contrary to some forecasts, the Bank of England’s Monetary Policy Committee held interest rates at 5.5%, when they met on Thursday.
This news will have disappointed many borrowers, especially those on variable tracker rates, and the reported 1.4 million whose current fixed rate is due to end in 2008, and who are now facing an increase of between 1% and 2% for a similar deal.
However, it may not be all bad news. Many interest rate forecasts are predicting further cuts to follow the 0.25% reduction in December, with predictions of a 5.00% base rate by year end quite common.
In addition, as the cost of funding mortgage deals has fallen considerably over the last few weeks, then it would seem reasonable to expect lenders to pass this on by offering cheaper fixed rate mortgages over the coming weeks. Perhaps an early sign of things to come is Leeds Building Society’s introduction of market leading fixed rates for both 3 and 5 years which were launched last week.
While we do expect cheaper fixed rates to come onto the market, the overriding advice is not to delay your decision in the hope of cheaper interest rates, when this could mean going onto your mortgage lenders standard variable rate. For more information and no-fee advice, borrowers should call free on 0800 373300.