Bank keeps interest rates at 5.25% - is this good news for mortgage rates?

Thursday 2 November, 2023

For the second month in a row the Bank of England has voted by 6-3 to keep interest rates at 5.25%, a 15 year high for interest rates.  This follows an increase in the previous 14 months.

Economic growth forecasts

Andrew Bailey, the Bank of England Governor said rates ‘will have to remain where they are now for an extended period.’  He remained cautious about the economic outlook and concerned about the outlook for inflation.   When the Bank announced their decision, they also downgraded the economic growth prospects for the UK for the coming quarters.  

What should you do if you are due to remortgage in 2023?

Amy Kadir, mortgage broker, St Albans, Hertfordshire said:

‘It is positive news that interest rates have remained on hold for a second month in a row but anyone whose mortgage deal is ending in 2023, or in the first half of 2024 should act now and contact our mortgage broking team for mortgage advice.  Information compiled by MoneySavingsExpert at 31/10/23 shows that for a £200,000 mortgage the average two-year, five year and ten-year fixes have fallen between August and October 2023.  For a loan to value of 60% the two-year fixed mortgage rate has fallen from 5.77% to 5.14%.  Although the Bank of England is cautious about inflation and economic prospects it is encouraging that mortgage rates have fallen, and better mortgage deals are available for customers.’

Amy Kadir, mortgage broker, St Albans, Hertfordshire continued:

‘Many customers aren’t aware that they can organise a new mortgage deal well ahead of their mortgage renewal date.  Many mortgage lenders will honour a mortgage deal for six months after it has been agreed in principle, so by sorting your mortgage early you are in an excellent position to lock into the lowest mortgage rates.  Our mortgage brokers can review the mortgage market so we can quickly find you the most suitable mortgage deal.  If you want to take out a fixed rate mortgage and rates continue to fall, we can always reapply for a new mortgage deal closer to your renewal date, so you don’t miss out.  We are finding that our customers are benefiting from discussing the mortgage market and their own financial circumstances.  It is also very difficult for customers to decide if they should continue with a fixed rate mortgage deal, take out a tracker mortgage or move onto their mortgage lenders standard variable rate as no one is sure what will happen to interest rates going forward.  We are used to having these conversations and can help anyone remortgaging work out what is best for them, so they make the best possible decision.’

In Summary…

Call our mortgage broking teams in St Albans and Lichfield if you want personalised mortgage and protection advice.

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up the mortgage repayments.  The information contained in within this article is for guidance only and does not constitute advice which should be sought before taking any action or inaction. The Financial Conduct Authority do not regulate some forms of buy to let mortgages.

 

 

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