Before selecting a mortgage product it is worthwhile looking at likely interest rate trends: The Bank of England’s Monetary Policy Committee voted in favour of raising base rate from 4.25% to 4.50% in an attempt to slow soaring price rises. The Bank admitted it will take longer for inflation to fall, due to food prices remaining elevated. However, inflation is expected to drop to 5.00% by the end of the year, above the 4.00% previously predicted, but still more than twice the Bank’s target. Sounding more upbeat about the economic outlook the Bank feels we will avoid recession with ‘materially stronger’ growth expected in the coming months. Most economists now believe we are close to, or at, the peak in base rate with the next MPC meeting due on the 22nd June 2023.
It is difficult to be definitive when recommending which of today’s products offer best value. Product pricing rose rapidly in the aftermath of the ‘mini-budget’ but has reduced considerably in recent months. Tracker products still offer good value and excellent flexibility, especially if bank base rate peaks at the lower end of expectations. Those with surplus capital should consider the tax advantages of an offset arrangement.