Before selecting a mortgage product it is worthwhile looking at likely interest rate trends: in their September meeting, the MPC voted 6-3 (up from 7-2) to keep interest rates on hold at 3.75%. Set against a backdrop of surging inflation, following a spike in oil prices after the breakdown in the ceasefire between the US and Iran, the decision was widely expected. With both Europe and the US recently raising their rates, the market is predicting that the Bank of England will have no option but to raise base rate when they meet again on the 5th November 2026. The longer-term direction of rates will depend on whether a new peace agreement can be reached. A further important date for the markets will be Andy Burnham’s first fiscal budget on the 28th October 2026.
It is impossible to be definitive which of today’s products offers the best value. Pricing rose steeply following the now- infamous mini-budget in September 2022 and has fallen steadily until recently. Volatility remains with the current geopolitical landscape. Fixed rates offer protection going forward, but the choice of term will depend on if and when base rate falls. Tracker products offer good value and excellent flexibility. Those with surplus capital should consider the tax advantages of an offset arrangement.