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Bank of England Update: Interest Rates Held at 5%

LATEST NEWS | 23.09.2024

Inflation has come down a long way this year, with interest rates following suit and finally hitting 5% in August, easing the pressure on households. For many, this decision couldn’t come quickly enough, whilst also not decreasing fast enough.

The bank’s decision to hold rates at 5% was widely expected, but when we will start to see a real impact on our mortgages?

Inflation has come down a long way this year, with interest rates following suit and finally hitting 5% in August, easing the pressure on households. For many, this decision couldn’t come quickly enough, whilst also not decreasing fast enough. The bank’s decision to hold rates at 5% was widely expected, but when we will start to see a real impact on our mortgages?  

What is the Latest Update from the Bank of England?

Borrowing costs have been held at 5% as inflation sits at 2.2%, which has come a long way since the onset of the pandemic in 2020. However, before we start to see even further cuts to interest rates, it seems the Bank of England needs to see more evidence that inflation will remain low before cutting rates further. It would seem the bank is being careful not to cut rates by too much, or too fast to keep inflation low, however, it is expected that further cuts will be made in November.    

What is the Impact on Mortgages?

The base rate of interest, set by the Bank of England, sets a base rate to charge other lenders when they borrow money, so any changes to the base rate affect the rate lenders are able to offer money for mortgages to their customers. If you are on a fixed rate deal then changes to the base rate won’t affect your mortgage payments until your fixed term comes to an end. Once ended, however, it will move to your lender’s standard variable rate (SVR) which could be influenced by the base rate, and likely to be much more expensive. If you are on a tracker mortgage, then you could be affected by a change in base rate. Tracker mortgages follow the base rate so any increase or decrease will impact how much you pay per month. You may be able to switch to a fixed-rate deal without early repayment charges so it’s worth enquiring with your lender.  

What to do if You're Worried About Mortgage Availability.

Although, thankfully, we haven’t seen an increase in interest rates, mortgage affordability is still high so, homeowners may need to struggle on for a little longer until we can be sure inflation remains low and is reflected in the interest rates. If you’re worried about mortgage payments, the best thing you can do is contact a specialist mortgage broker in Manchester, like Taylormade.   

Get in Touch with Us Today, Your Trusted Mortgage Advisor in Manchester.

Taylormade is an experienced and reliable mortgage broker in Manchester, also operating throughout the UK, with a wealth of knowledge and helpful advice on the best course of action for you to take in today’s mortgage climate. We have the scope and experience to scour the market in search of the best deals. So, contact TaylorMade today: we are the leading mortgage advisor in Manchester.
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