The Bank of England (BoE) Monetary Policy Committee (MPC) announced an interest rate hike for the seventh time in a row, a move expected to cost millions of households more than £3bn in extra mortgage costs.
Today’s interest rate rise takes the base rate to 2.25% the highest level since November 2008, when the banking system faced collapse. The Bank of England’s monetary policy committee voted by five to four to hike the rate by half a percentage point. Analysts had predicted the rate could have risen as much as three quarters of a percentage point.
With inflation running at a 40-year high and interest rates moving on an upward trajectory many are looking to the government to offer much needed support.
This rate decision comes a day before Kwasi Kwarteng delivers his mini-budget to the House of Commons, amid expectations for sweeping tax cuts in addition to already announced measures capping average energy bills at £2,500 for a typical household and offering similar support to businesses.
Those on a fixed rate mortgage are currently protected from this rate rise, however if you have less than six months left to run on your mortgage deal, it makes sense to lock in a new fixed rate as soon as possible, ahead of potential further rate rises.
We are available to review your investment and personal mortgages and provide you with access to competitive, long term fixed rates.
If you would like to discuss options available to you, speak to a member of the team or our senior broker, Danny O’Keeffe on 0208 364 3444 alternatively schedule a call back by clicking on the button below.
Liz Truss Plans to Cut Stamp Duty:
It is widely reported that Prime Minister Liz Truss will cut the rates of stamp duty for UK home purchases. The premier and her Chancellor of the Exchequer Kwasi Kwarteng will announce the measure on Friday as part of a mini-budget to boost the country’s economy.
Any reduction in the levy will probably bolster home prices, which soared during the pandemic when the tax was suspended for many buyers in order to stimulate demand. Many economists have predicted house prices to fall by 4.5% next year.
Major Lenders are Actively Increasing Rates:
Many lenders have been actively increasing their product rates, even before today’s interest rate hike. Natwest has increased rates for Purchase and Remortgage products with : Rate increases of up to 35bps on 2 and 5 year deals. Nationwide also announced that they were increasing selected fixed rates by up to 0.25% across their Switcher product range.
Santander has made similar announcements, increasing new business and product transfer range fixed rates by up to 0.80%. If your fixed rate mortgage is coming to an end, we encourage you to get in touch to discuss options available to you. Call us on 0208 364 3444 alternatively schedule a call back by clicking on the button below.