At the latest meeting the Monetary Policy Committee (MPC) voted eight to one in favour of maintaining the status quo, with the remaining member preferring a reduction in the rate.
What does it mean for your mortgage?
If you have a fixed rate, it won’t move whatever happens to rates until the end of your agreed term. There are many borrowers with fixed rates ending this year, so they will be keeping an eye on rate movements and hoping for a future cut to minimise their ongoing costs.
David Hollingworth, director at L&C Mortgages, said: “Those that fixed for a couple of years during the peak of the mini budget volatility could be delighted to see the back of their deal.
“On the other hand, there are still swathes of borrowers edging toward the end of an ultra-low fixed deal that has given them protection from the rate hikes over the last five years.”
Borrowers on a tracker rate will see no change as their pay rate mirrors base rate movements. Variable rate borrowers are unlikely to see a change to their current rate, although lenders can change their standard variable rate at their discretion, regardless of interest rate movements.
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Those looking for their first mortgage or a new deal will be hoping for a cut in base rate at the next MPC meeting in May.
Expert insight
Matt Smith, Rightmove’s mortgage expert said: “Now that this expected interest rate hold is out of the way, all eyes are on May’s decision where the current forecast is a second cut of the year.
“Since the last decision in February, average mortgage rates have trickled downwards slightly but pretty much stayed flat. We’re seeing lenders try to price competitively where they can to capture business during some of the busiest months of the year for home-moving.
“However, there currently isn’t much wiggle room for lenders to offer cheaper rates, and hopefully a second cut can spur forward another wave of falling rates, and bring average rates closer to 4% rather than 5%.”
Sarah Coles, head of personal finance at Hargreaves Lansdown, added: “No news isn’t good news for mortgage holders, who’ll need to wait longer for cuts.
“The slightly better news is that fixed rates have inched down in recent weeks. And while we’re not expecting anything significant in the immediate future, overall rates are expected to trend downwards over time.”
