What does the latest Bank of England Base Rate announcement mean for your mortgage?

What does the latest Bank of England Base Rate announcement mean for your mortgage?

If you’re thinking about a house move, you’re probably watching the announcements on interests closely, to help you set your budget or even decide if buying a new home is viable at all. Earlier this month, the Bank of England declared that its Base Rate will remain at 5.25% – the second hold after 14 consecutive rate rises.

According to property website Rightmove, mortgage rates have been edging downwards over the past three months, from a July peak, putting the average five-year fixed rate at 5.38% compared to 6.08% that month. The portal says it expects mortgage lenders to become more competitive over the coming weeks with additional rate falls.

Rightmove’s mortgage expert, Matt Smith said: “A second consecutive pause is a good indicator that Base Rate has reached its peak, which will be reassuring to those looking to take out a mortgage soon.”

He added: “We’ve now seen the arrival of a sub-5%, five-year fixed rate mortgage in the important 85% loan-to-value bracket: the deposit size we see for many first-time buyers and home-movers. After today’s news, we can expect mortgage rates to continue to edge downwards.”

For people with an existing mortgage, the announcement is unlikely to have an impact on their finances. Those with fixed-rate deals won’t see a change until the end of the mortgage term. The Base Rate hold also means that people who have tracker mortgages won’t see a difference in their monthly payments.

The Bank of England’s Monetary Policy Committee meets every six weeks to discuss interest rates with the next announcement expected on 14 December 2023.

Read more about this story on the Rightmove website.