Adrian Anderson, director of property finance specialists, Anderson Harris, said: “The decision made today by the Bank of England to keep Base Rate at 5.25 percent was a very close call with MPC members voting five to four to keep rates unchanged.
“Whilst this will bring respite for many mortgage holders, I remain concerned about the ongoing affordability both for the circa 2.2m borrowers who are paying a variable rate mortgage and those looking to secure a new mortgage product in the near future.
“Mortgage arrears have jumped by 28.8 percent over the past year.”
Mr Anderson said that, while the number of mortgage holders falling behind on their payments is still low at one percent, the “full impact” of these high mortgage rates is “still yet to be felt” as many consumers’ fixed rates have not yet come to an end.
He added: “Whilst we ask ‘Is this the end of the interest rate rises?’, borrowers are welcoming news that lenders have been reducing fixed rate pricing and this trend is expected to continue as SWAP rates have been falling and lenders compete for a larger share of a shrinking market.
“There are now sub-five percent five-year fixed rates available.”
Myron Jobson, senior personal finance analyst at interactive investor said the “biggest winners” from the BoE’s decision are those with a tracker mortgage deal.
Mr Jobson said they “will breathe a huge sigh of relief, having been pummelled by a series back-to-back rate rises, which has resulted in higher monthly mortgage repayments. This cohort faced a £26 a month increase to their mortgage repayments if the bank pressed ahead with a 25-basis point increase to the Base Rate.”
However, he noted: “Mortgage holders with a fixed-rate deal continue to be shielded from the recent movement in interest rates. However, it’s important to keep an eye on the horizon, as once that shelter expires, they’ll likely contend with higher rates when refinancing their mortgage.”
