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The Monetary Policy Committee (MPC) has voted in favour of holding the Base Rate at its current level for the second time in a row. Have we now seen the last of the Base Rate hikes?

In the ongoing attempt to curb inflation, the Bank of England voted for fourteen consecutive Base Rate rises between December 2021 and August this year. This rate rise streak ended last month, and today’s news suggests the outlook for borrowers looks more positive.


What can landlords expect from the Base Rate?

Going forward, we expect the Base Rate to stay at its current level of 5.25% for most of 2024. Then, so long as the market remains strong, we expect to see some reductions around this time next year.

These predictions are, of course, subject to ongoing global affairs and political issues we face, as well as the UK general election set to take place at some point next year. However, industry experts are confident that we have turned a corner on inflation and, therefore, Bank of England Base Rate rises for the foreseeable. This means the money markets should also remain stable, in fact, we should see reductions in SWAP rates. As such, capital market-funded lenders will have scope to price their products more competitively, which is good news for mortgage borrowers!


What does this mean for my mortgage?

Today’s news won’t see a significant change in interest rate pricing for landlords on fixed and variable mortgages.

If you’re on a fixed rate and are approaching your remortgage, you may find that some lenders adjust their product pricing over the next few days. However, as lender product pricing is based on SWAP rates rather than the Base Rate, most lenders will have today’s news priced in already. Consequently, mortgage product pricing is likely to remain at current levels, with some slight reductions, for the time being.

Many lenders are looking at innovative ways to make their product offerings more competitive. For those struggling to meet tighter stress testing criteria, some lenders offer lower rates with higher arrangement fees to help as many landlords access property finance as possible. Speaking to one of our expert mortgage brokers to explore your remortgage options and see what rates you can access is essential. Remember, the best rate for you doesn’t necessarily mean the cheapest!

If you’re on a variable or tracker rate mortgage that tracks the Base Rate, your mortgage repayments will stay the same. You should now benefit from a period of financial security as your monthly repayments are unlikely to change for the foreseeable future. However, that does not mean you’re on the most affordable product, and it may be that you could access a more competitive fixed-rate deal.

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