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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 maintained base rate at 5.25% in May, voting 7-2 in favour of a sixth successive hold. Two members voted for a reduction.  Inflation is falling fast and expected to continue to reduce and hit the 2% target ‘in the next couple of months’.  Financial markets are now pricing in two or three base rate cuts this year, the first of which may come as early as June.  However, if history has taught us anything we must continue to ‘expect the unexpected’.

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, but has fallen in recent months as the market now anticipates rate cuts.  Fixed rates offer protection going forward but the choice of term will depend on how quickly rates fall. Tracker products offer good value and excellent flexibility. 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.