The Bank of England announced the day before Brexit that it would keep the base interest rate at its current level of 0.75%.
So, what does this mean for those already with and those who want to secure a new mortgage?
Firstly, the decision to hold the base rate indicates that there is confidence in the UK’s economy.
Had the base rate been reduced, it may have intensified competition between mortgage lenders even further. However, the low-interest climate means the great deals available to borrowers are unlikely to disappear anytime soon.
There is a possibility that the Bank of England could consider increasing the base rate over the coming months, depending on how Brexit plays out. Therefore, borrowers looking to purchase or remortgage might consider securing a low deal sooner rather than later.
This means that prospective buyers needn’t worry about any sharp mortgage rate increases, or a sudden and unexpected surge in house prices beyond a temporary spike of activity immediately following Brexit. Even if you are on a standard variable rate, it’s unlikely that there will be any drastic changes to mortgage rates this year or next.
Over the past few months, competition between lenders has seen more products than ever available to both the mainstream residential and buy-to-let mortgage markets. Rates are historically low for many borrowers, who are being urged to take advantage of this wherever possible.
The latest data released for 2019 showed that residential mortgage approvals had seen a significant upturn compared to 2018, with the highest number of mortgages approved in the past four years. The value of the mortgage market has also been on the rise, and the sector is seeing a revival in confidence since the December general election.
If you’re thinking of buying your first home or moving to a new one, come and speak to Clare Murray (mortgage advisor Belfast) who will take you through the next steps with a completely free consultation.