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Bank of England holds Base Rate at 5.25%

As predicted, the Bank of England’s Monetary Policy Committee (MPC) voted 7 to 2 in favour of holding the mortgage interest rate at 5.25%. Find out why the Bank of England has held the rate again, and how this could affect your mortgage for the rest of 2024.

A photo of Daniel Sharpe-Szunko, the author

By Daniel Sharpe-Szunko

Published on: 20 June 2024

2 min read

Bank of England holds Base Rate at 5.25%

As predicted, the Bank of England’s Monetary Policy Committee (MPC) voted 7 to 2 in favour of holding the mortgage interest rate at 5.25%. Pressure to drop the rate had increased significantly following yesterday’s announcement from the Office for National Statistics (ONS) that inflation had dropped to the government’s target of 2%.

Despite growing pressure from the government in the run up to the general election on 4th July 2024, the rate will not come down before then. This could have been another blow for the Tory party and Rishi Sunak who are already struggling with voters in the polls.

Today’s announcement from the Bank of England shows yet again that the economy is still stagnating, even though inflation is coming down.

Cost of living is still high and millions of families in the UK are struggling to manage their finances. Sky News reported on the Bank of England Base Rate today, noting that this is now the 7th time that the BoE has voted to hold the rate at 5.25%.

Bank of England holds interest rates at 5.25% for seventh time in a row

Mortgage arrears hit an eight-year high in the first quarter of 2024 according to official data and household debt is set to rise by £1,600 this year. There are still major concerns among millions of households with no sign of mortgage rates dropping by a significant amount in the next 12 months.

Some mortgage lenders had already reacted to the reduction in inflation, for example NatWest announced significant cuts in mortgage interest rates yesterday. Mortgage interest rates are still more volatile than ever and we’re seeing more unpredictability in the mortgage market than there has been in years.

What should I do with my mortgage?

Our experts are predicting a slight reduction in the mortgage interest rates over the next 12 to 24 months as the economy settles. There’s still a lot of uncertainty as we approach a General Election and still in the shadow of the recent recession.

If you need help or advice with your mortgage then you can contact one of our friendly experts on 0800 009 6559 or CLICK HERE.

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Is a fixed rate mortgage a good idea now?

High mortgage interest rates have caused stress and concern for families across the UK over the last few years, and switching to a fixed rate mortgage can help in some situations.

A fixed rate mortgage offers more financial security compared to a variable rate, as your mortgage payments won't change during your 'fixed term'. You can choose for your mortgage rate to be fixed for either 2, 3, 5, or 10 years, depending on your lender and which option feels right for you.

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Everything you need to know about fixed rate mortgages - MPO

Will mortgage rates go down in 2024 UK?

Our MPO Money Mum & Dad are constantly checking the market to see what is happening with UK mortgage rates. Many economic experts now believe that the Bank of England base rate will go down by 0.25% in the Summer of 2024, with rates potentially settling at around 3.5% next year.

Banks will generally use the BoE base rate to decide which mortgage rates to offer, and certain types of mortgage (tracker rate mortgages) will be directly affected by any BoE rate changes.

What is the current mortgage rate UK?

UK mortgage rates will change over time, and currently the Bank of England (BoE) base rate is 5.25%. The BoE interest rate directly affects how much people on tracker rate mortgages will pay, and can also cause lenders to adjust their Standard Variable Rates.

Our MPO mortgage experts are constantly checking the rates on offer from each mortgage lender, to keep UK consumers up to date with the latest changes.

How much do you need for a mortgage in UK?

It can be hard to figure out how much money you need to earn to get certain types of mortgage -especially if you are a first time buyer or it's been years since you applied for one.

A lot of UK lenders will want you to earn at least £20,000 per year to qualify for a mortgage, but this isn't a general rule. People with lower incomes may still be able to get a mortgage based on:

  • Your credit score/credit history
  • The mortgage lender that you apply to
  • The type of mortgage that you need
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How much do I need to earn to get a mortgage? - MPO

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