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  • Writer's pictureDonna Stonelake

Mortgage's and Interest Rates

What does the Base Rate hold mean for my current mortgage?

Best Estate Agent in Cwmbran

Changes to the Bank’s Base Rate can impact the amount of interest you pay on loans, including mortgages. If you're on a fixed-rate deal, your monthly payments won’t change until the end of your deal. However, if you're on a variable or tracker mortgage, the current Base Rate hold means your monthly payments will remain unchanged.

If you're nearing the end of your fixed-rate mortgage, you might be considering the rate you'll be offered on your next deal. A useful way to estimate how much you could borrow is by using a mortgage calculator. Additionally, applying for a Mortgage in Principle can provide a personalised result, bringing you closer to a mortgage offer.

In July 2023, the Mortgage Charter was introduced to assist those struggling with monthly payments and borrowers nearing the end of their fixed-rate deals. Under this Charter, borrowers can secure a new deal up to six months before their current deal expires. Additionally, you can request a better like-for-like deal with your lender up to two weeks before your new term begins, if available.

When might interest rates start to decrease?

The Bank of England’s Monetary Policy Committee convenes approximately every six weeks to discuss and vote on whether to adjust interest rates. While it's widely believed that the Base Rate has peaked and may begin to decline in the second half of 2024, historical trends indicate that interest rates often stabilise before beginning to decrease.

In late 2023, market projections suggested that the first Base Rate reduction might occur in late Spring 2024. However, the Bank of England has cautioned against premature rate cuts, indicating that reaching its 2% target will take time. Presently, it's increasingly likely that, barring any significant economic shocks, the Base Rate will be reduced at some point this year and continue to decline through 2025. Nevertheless, this outlook remains contingent on broader economic conditions.

The next interest rate decision will be announced at 12 pm on 20 June 2024.

If your looking for the best service from a cwmbran estate agent contact us to discuss your needs or get a Free Valuation.

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