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Interest Rate Commentary

Before selecting a mortgage product it is worthwhile looking at likely interest rate trends:  The Bank of England’s Monetary Policy Committee voted 6-3 in favour of raising Base rate from 3% to 3.50% in December, although the fact that two members voted to remain at 3% suggests we may not now see an increase to the 5%-6% levels only recently predicted by some economists, with many now forecasting that rates will peak next year between 4%-5%.  The Bank warned however, that persistent inflationary pressures and a tight labour market could still warrant ‘a further forceful monetary policy response’.

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 now appears to have settled and fixed rates have edge down in recent weeks.  Tracker products still offer reasonable 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.

© Copyright Professional Mortgage Services. The information contained herein may be based on data obtained from recognised statistical sources, issuer reports or communications, or other sources believed to be reliable. However, such information has not been verified and we do not make any representations as to its accuracy or completeness. Any statements non-factual in nature constitute only current opinions which are subject to change, without notice. The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK.