The Bank of England holds the base rate

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The Bank of England held the base rate at 0.75% which came as no surprise to brokers and lenders alike.

The Bank’s Monetary Policy Committee voted 9-0 in favour of doing so. This follows last month’s rise of 0.25% which took the rate to its highest level since March 2009.

Kevin Roberts, director, Legal & General Mortgage Club, said: “With a rise in the base rate last month, it’s hardly surprising that the Bank of England has decided keep rates at their current level this month.

“This will be welcomed by borrowers, who continue to benefit from near-record low rates and a mortgage market that is delivering a growing number of innovative solutions for customers.

“However, the low-interest rate era won’t last forever and customers coming to the end of their mortgage term would be prudent to consider locking into a new fixed rate now, to take advantage of some of the great deals that remain on the market.

“Speaking to an adviser can be an excellent place to start, providing extensive product choice and the professional advice to help borrowers find a mortgage that suits their needs.”

David Hollingworth, mortgage expert at L&C Mortgages, agreed that it was as expected and thought mortgage borrowers will still be working through what the last rate rise means for them.

He said: “Most lenders have now shown their hand on standard variable rates and in the majority of cases have reflected the full base rate increase.

“Those borrowers that have been informed of a forthcoming increase in payment should take that as a prompt to shop around for a better deal, as standard variable rates can be around 5% or higher.

“UK Finance reported that the remortgage market saw its strongest July for more than a decade, suggesting that many borrowers have already been taking action to pin down their mortgage payments, with most fixing their rate to protect against any further rises to come.

“Borrowers that have failed to switch so far should take confidence from the fact that lenders continue to offer very competitive deals in a bid to attract their business.

“Traditionally, lenders will sharpen their re-mortgage pricing as they make a push to get mortgage business on the books before the end of the year and that could represent an opportunity for borrowers.”

Steve Seal, director of sales and marketing, Bluestone Mortgages, added: “With the previous interest rate rise still fresh in consumers’ minds and living costs on the rise, many borrowers will be relieved by today’s decision to hold the base rate.

“However, challenges facing buyers looking to step onto the property ladder mean that it won’t be plain sailing for everyone.

“Individuals unable to demonstrate flawless credit scores or regular incomes, such as the self-employed, can still find themselves blocked from the best deals and, in some cases, squeezed out of the market.

“Whether rates rise or fall, specialist lenders will play a crucial role in ensuring that those able to prove affordability, regardless of their career choice or distant credit history, can access funding solutions and are not faced with unreasonable ‘hiked’ up prices.”

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Written by: Houseladder