In attempts to bring down inflation, mortgage repayment costs in the UK have remained high and while the CPI (Consumer Prices Index) fell in March to 3.2%, there were other economic indicators, such as pay growth and services sector inflation, that remained unchanged, sending mixed signals on when we are due to see a rate reduction in our future.
Let’s take a look at what Thursday’s Bank of England meeting had in store for UK mortgage rates.
The Latest for Interest Rates from Thursday’s Bank of England Meeting
At midday on Thursday, the Bank of England’s Monetary Policy Committee (MPC) announced they were to keep the current rate of 5.25% unchanged. However, it is predicted that oil and gas prices will drop, meaning that inflation will likely follow suit and drop to around 2% next year and 1.5% in 2026, with the UK economy seeing a growth of 0.5% this year and 1% in 2025.
Even though interest rates have been held for the sixth time in a row and have yet to fall since August last year, it would appear we are moving in the right direction, getting very close to the first rate cut since 2020. With the next base rate review due in June, analysts are predicting that will be the time to see a rate cut, however, many believe that the August review is looking more likely.
Another Rate Hold is a Positive for Savers
Some good news to come from yet another rate hold is how a high base rate impacts savers. High interest rates can mean saving for a mortgage is more lucrative and with the added bonus of many savings accounts paying more than the rate of inflation, savings can add up quickly. Whilst the rate remains the same, now is a good time to review where your savings are held and make the most of these returns.
Mortgage Rates: What Does this Mean for Borrowers?
Although there is no change to fixed-rate mortgage deals for now, it’s important to shop around if your deal is due to end. Locking in will mean you’re safe if the rate should increase but it also means that your payments remain the same if the rate drops. You have a few options for a fixed-rate deal:
- If you’re near the end of your term you could lock in a new offer 6 months ahead, which will insure you against rate rises, plus the flexibility to switch to a cheaper deal if one arises before your current rate finishes.
- If your current fixed rate is ending sooner, a tracker without early repayment charges could be helpful, meaning if the rate reduces you could move to a new fixed rate without a penalty charge. It’s important to note that trackers are currently around 1% higher than the cheapest fixed-rate deals.
If you’re currently on a tracker mortgage there is no change, as the base rate has remained the same although again it’s useful to see if you can switch to a better deal if it is coming to an end. If you’re on a standard variable rate (SVR) which you are usually moved onto after your fixed rate comes to an end, these move at the mercy of your lender and tend to be expensive, so checking if you could save by switching now is highly advised.
Speak to a Trusted Mortgage Advisor in Manchester Today
At Taylormade, we understand the financial difficulties facing everyone right now, that’s why we are a dedicated, professional, and independent
mortgage broker in Manchester with access to the best mortgage rates on the market today. Our friendly, helpful advice could be just the solution you need if you find yourself not knowing which way to turn.
So, contact TaylorMade today: we are an expert mortgage broker based in Manchester and operating throughout the UK.
