Mortgage market uncertain on base rate change
The Bank of England’s Monetary Policy Committee will meet this week to review the base rate.
According to Alexander Hall, the mortgage firm, an interest rate adjustment will cause a “flurry of change” that will affect the choice of mortgage products available.
The Bank of England’s base rate currently stands at 5.75% and a change could have a significant impact on the mortgage market because most lenders have not yet decided upon their pricing policies in the long-term.
The broker’s chief operating officer, Andy Pratt, believes that many lenders are waiting for this month’s base rate decision and then will change interest rates in accordance with it.
However, he senses a level of uncertainly in the mortgage market and it is possible that some lenders would follow a downward move, while others would not.
The credit squeeze has made many lenders uncertain and a reduction in the base rate may not automatically lead to reduced mortgage interest payments.
In these circumstances, borrowers are well advised to seek impartial advice to secure the best product.