Breaking News: The end of interest rate rises?
The Bank of England, for the first time since December 2021, has kept the base rate at 5.25 percent during its latest announcement at lunchtime today.
This marks a significant departure from the 14 consecutive rate hikes that had been implemented prior, which resulted in higher mortgage payments and increased savings rates. However, the Bank’s decision to pause these rate hikes comes in the wake of a surprising decline in yesterday’s inflation figures, dropping from 6.8 percent to 6.7 percent.
What does this mean for mortgages?
With activity having already increased in September as those already looking to move this year committed with the mortgage rates they had, this could create a further increase in new buyers as confidence returns to the market and buyers and sellers alike feeling more settled.
Banks and financial firms have announced a fresh wave of home loan reductions leading up to the Bank of England interest rates decision. The latest reductions will improve conditions for homebuyers and those hoping to remortgage on to a new deal.
This latest development raises the possibility that the cycle of rate increases may have reached its peak. Over the past year, millions of homeowners experienced rising mortgage costs. Yet, in recent weeks, there has been a slight decrease in rates as swap rates stabilised. There is optimism that they may decline further now that the base rate hikes have been put on hold.
As the rate has remained at 5.25%, this is great news to those who are on tracker or variable rates. Typically, when rates go up, it implies that mortgage payments, depending on the specific mortgage type, will go up as well. However, certain mortgages, such as tracker or standard variable rate (SVR) mortgages, can be immediately affected by these rate changes.
For those prospective buyers who have been hesitant amid recent market fluctuations, now is the time to speak to an adviser as lenders look to add competitive rates to the market.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.