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Bank of England Announce Base Rate Increase

Bank of England Announce Base Rate Increase

June 16th, 2022

Mortgage rate rises to 1.25%

As predictions come to light in recent months the Bank of England have Today met to discuss the UK base rate.

They announced it has increased the base interest rate from its previous level of 1% to 1.25% the highest base rate percentage in over 10 years.

Simon Butler | Head of Mortgages CMME said “if you are concerned or your mortgage fix is coming to an end then now may be the right time to speak to a broker. There are still competitive mortgage rates and products available but the BOE has warned that inflation could reach 10% by the end of 2022, matching levels seen almost 40 years ago.”

Minutes from the Bank of England’s latest rate-setting meeting also reveal that it expects the UK economy will shrink by 0.3% in the second quarter – between April and June.

If you are unsure about your mortgage deal, please speak to your CMME mortgage broker HERE.

Despite this increase in the mortgage rate, the early positive sign is that there are still plenty of competitive mortgage products available for potential and existing homeowners.

Another issue for contractors?

CMME recently reported on the unfair treatment the self-employed community perceive they have when applying for a mortgage, with two-thirds of people worried they would be penalised for being self-employed when applying for a mortgage.

The good news is that although the rate does mean that you may be paying more for your mortgage, the lending criteria for most mortgages have remained largely the same. Although, due to changing remortgage rates with lenders, CMME Brokers are advising clients not to wait around before making a decision on their mortgage plans if they are considering a remortgage or property purchase.

Market commentators continue to predict further base rate increases in 2022, with a key factor in any rises being the impact of higher living costs for UK households. Balancing the need to increase rates while not overburdening homeowners with surging mortgage payments is going to be a difficult task for the central bank”

What can I do to make sure my mortgage is still competitive?

Review your Mortgage:

As mentioned, if you are already on a fixed rate then you will remain on your current rate until the fixed term ends. If your mortgage is due for renewal in the next 6 months, then now may be the right time to discuss remortgaging or transferring to a new product with your existing lender.

Make sure you’re on the best deal:

As with most things, mortgages are offered, with a wide range of different products available from many lenders. Reviewing the whole market is always a good decision, generally, when discussing a new deal CMME will look at many options, plus exclusives to ensure you get the best rate for you as a contractor or self-employed worker.  

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