Some commentators had anticipated a rate cut given ongoing economic uncertainty surrounding Brexit, but rates were held as, according to the Governor of the Bank Mark Carney: “the most recent signs are that global growth has stabilised.” The Monetary Policy Committee has indicated however that it would be prepared to cut interest rates if economic growth remained subdued.
The meeting was Mark Carney’s last as Governor of the Bank of England. The new Governor, Andrew Bailey, will begin his eight-year term in the role in March.
What this means for your mortgage
The decision to hold rates at 0.75% provides some certainty for homeowners on variable rate mortgages, at least for the time-being, as it means their monthly payments should remain the same.
Interest rate decisions don’t impact those on fixed rate mortgages as their rate won’t change during the term of the deal, although it’s important to keep an eye on any movements to avoid any nasty surprises when the fixed term finishes.
If you’re concerned about interest rates rising in future and are currently on a variable rate, now is a great time to lock into a fixed rate deal.
Competition amongst lenders has helped to drive mortgage rates down over recent months, and the margin between 2 and 5 year fixed rates has narrowed, so those looking for longer term peace of mind could find that they can lock in now at attractive rates.
Bank of England holds rates at 0.75%