Before selecting a mortgage product it is worthwhile looking at likely interest rate trends: in their April meeting, the MPC voted 8-1 to hold base rate at 3.75%, with one vote for a rise. The Middle East crisis has caused oil and gas prices to spike with the Bank suggesting the possibility of ‘forceful rises’ to come. In the best-case scenario, if the conflict is resolved relatively quickly then base rate may remain the same throughout the year. The more likely scenario is one or two increases to combat rising prices. The worst case scenario, however would see sustained higher inflation and multiple base rate hikes. All eyes will be on the next MPC meeting scheduled for the 18th June 2026.
It is impossible to be definitive which of today’s products offer 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 when and if base rate falls. Tracker products offer good value and excellent flexibility. Those with surplus capital should consider the tax advantages of an offset arrangement.