Mortgage customers on tracker rates may be rejoicing after the Bank of England’s Monetary Policy Committee MPC opted to keep the base rate of interest on hold again.
It is the 28th consecutive month that the rate has been frozen at 0.5 per cent – an all-time low for the UK.
Commenting on the news, John Charcol spokesman Ray Boulger explained that the chances of the MPC changing its mindset over the coming months is low.
“As the markets become increasingly worried about the growing intensity of the euro crisis, caused by the fundamental flaws in its concept and hence impossible to solve on a permanent basis, the likelihood of the MPC increasing Bank Rate any time soon diminishes,” he said.
“The question now is not whether Bank Rate will increase this year but whether it will increase next year.”
Such speculation could bring relief for tracker rate mortgage customers, as they might be able to look forward to a period of relative certainty over how much they will pay.
Mr Boulger added that the home loans market is looking more positive, with a few 95 per cent loan-to-value deals creeping in from lenders “who employ sensible human underwriters to consider applications”.
Meanwhile, John Charcol today (June 8th) criticised the use of seasonally adjusted house prices, with Halifax and Nationwide reporting very different statistics for May.