The Bank of England has held interest rates at 5.25% offering hope the era of rate hikes is at an end.
Borrowers on tracker mortgages will be breathing a sigh of relief as today’s decision will mean their rates will remain at their current level.
Lenders have already been lowering prices on fixed-rate mortgages but experts think there could be better rates to come.
David Hollingworth, associate director of L&C Mortgages said: “With another hold decision borrowers will now be hopeful that they have seen the last of rising rates.
“Of course, we will need to avoid any more nasty surprises and see inflation continue to fall but the mortgage market has already shown much greater stability.
“Mortgage rates have been improving slowly but surely and today’s decision should only help to ensure that trend continues for now.”
Will rates start falling any time soon?
The Base Rate has risen to 5.25% at a fast pace over the last two years – back in November 2021 it was at 0.1%.
The Bank of England has increased it at every opportunity in a bid to bring down inflation, but but this has sent mortgage rates soaring.
Laura Suter, head of personal finance at AJ Bell, said whilst the fact the rate is on hold is good news, it may be some time before we see them fall.
“The Bank [of England] itself says the market expects rates to only hit 4.25% by the end of 2026,” she said, “showing how glacial the path down could be.
“With risks like the conflict in the Middle East and a potential spike in oil prices, not to mention the potential for a surprise in inflation numbers or another economic data point, we can’t entirely rule out any further rate hikes.
“And the Bank has certainly not ruled it out, if it sees ‘more persistent inflationary pressures’.”
Of the nine members of the Bank of England’s monetary policy committee, three voted for a rate hike today. Suter said this showed there was still appetite among the committee to tighten monetary policy further.
What to do if you are remortgaging
For those whose current mortgage is about to come to an end, the advice is to do your research and make sure you are getting the best deal.
Hollingworth said: “Borrowers approaching the end of their current deal should shop around to ensure they have a rate in place.
“They will be able to review if the market continues to improve but having a rate in place should help avoid an expensive period on a standard variable rate that can be well over 8 or even 9%.”
