In the latest base rate review, the Bank of England’s Monetary Policy Committee has voted to keep the rate the same.
The Bank of England reviewed the base rate on 21 March and decided to keep it at 5.25%. It has remained unchanged since August.
Recent news about CPI inflation coming down in February to 3.4% has been encouraging, but the base rate is not expected to fall until the summer. Even then, it’s hard to make concrete predictions about exactly when the first cut will take place.
Research firm Capital Economics claims that the base rate will reach 3% by the end of 2025, but other analysts predict it will fall to 4% by the end of next year. In my view, it’s impossible to predict figures and timelines with any certainty.
The mortgage market has seen some interesting activity. Halifax recently announced that it will reduce the maximum working age from 75 to 70 for some older borrowers.
This means that, in some cases, a mortgage would need to be paid off when a person is 70 rather than 75, giving them less time to clear their mortgage.
Interest rate changes
At the start of this year, lenders were cutting rates. However, in the past few weeks, interest rates have edged upward slightly. Two-year fixed mortgage rates are broadly hovering around 5%, which is substantially down from July 2023, when they were over 6.5%.
While we are seeing some rate reductions, rates are unlikely to return to the historic lows we’ve seen in the past anytime soon.
Seek expert advice
If you’re due to remortgage this year, don’t leave it too late to seek mortgage advice. Speak to us now, and we’ll lock in the best rate for you. If rates come down, we’ll resubmit your application for you. That way, whatever happens, you’re guaranteed to secure the most competitive rate available.
The next base rate review takes place on 9 May.