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 to keep bank base rate on hold at 5.25%, in line with economists’ expectations. The Bank sounded a cautionary note when it said that ‘monetary policy is likely to need to be restrictive for an extended period of time’. Policymakers are now watching for any signs that the conflict in the Middle East causes a fresh round of higher inflation whilst also keeping an eye on the slowdown in economic growth and risk of a recession. The next MPC meeting is on the 14th December 2023.
It is impossible to be definitive when recommending which of today’s products offer best value. Product pricing has risen steeply over the last year but has now started to edge down as the market anticipates the peak in the current cycle. Fixed rates offer protection going forward but the choice of term will depend on how quickly rates begin to fall. Tracker products offer good value and excellent flexibility. Those with surplus capital should consider the tax advantages of an offset arrangement.