Nigel Tennant from Mortgage Advice Bureau in partnership with Barbers comments on the latest Bank of England base rate decision.
No-one expected the central policy setters to make any changes to the Bank Base Rate during their July meeting in spite of inflation being at close to 5%. No-one could accuse the Monetary Policy Committee (MPC) of inconsistency, as for the 28th consecutive month they have once again retained the bank base rate at 0.5%.
The economy has grown by a less than impressive 0.1% in the three months to the end of June and this, together with a continued squeeze on household incomes arising from the unrelenting rise in the cost of living, will have been a factor in determining that the economy is not yet in a position to cope with any increase in the cost of borrowing.
Notwithstanding the wider economic climate, mortgage lenders are doing their best to offer new and existing borrowers some very competitive mortgage products. Moneyfacts recently commented that 2, 3 & 5 year average fixed rates having reached all time low levels.
Average mortgage rates for 2 and 5 year fixed rates have fallen back further in July from June by 0.08% and 0.28% and now stand at 4.36% and 5.16% respectively. Average 2 year tracker rates picked up marginally to 3.50% in July, recording a small rise of 0.12% from June, but still below where they were at the same point in 2010.
Lenders continue to show a greater appetite to lend by increasing the number of products to an average of more than 7,400 during June, an increase of more than 3% over May. This increase in supply and product choice provides some positive news for new and existing borrowers alike and means that those buyers and remortgage customers looking to enter the market even in this tough economic environment, can do so, knowing that this is one element of their spending where costs for many are falling.
Nigel is from Mortgage Advice Bureau in partnership with Barbers. For further information on how the latest base rate decision affects you, please call 01952 221200 or email n.tennant@barbers-online.co.uk or click here to visit to Mortgage Advice section of our website.
Your home may be repossessed if you do not keep up repayments on your mortgage. A fee of up to 1% of the mortgage amount may be charged depending on individual circumstances. A typical fee is £95.
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