Bank of England retains rate at 5.25% – How will it affect mortgage rates?

Thursday 21 March, 2024

Once again, the Bank of England has maintained its current rate at 5.25%. But how will this affect Mortgage Rates and Mortgage Products?

Inflation Falls to 3.4%

Inflation has dropped by 0.6% to 3.4%, the lowest rate since September 2021. However, the BoE committee needs to see more evidence that inflation will fall further before introducing interest rate reductions. BoE governor Andrew Bailey confirmed after the last MPC meeting the "good news" on inflation reductions in recent months. However, reaching "all the way to 2%, and staying there" is still seen as the magic combination before interest rates can be reduced.

Short Shelf-Life Mortgage Deals

Mortgage deals aren’t currently sticking around for long – typically just 15 days. Moneyfacts has cited the shelf-life of mortgage offers as the shortest in six months.

With upwards of 6,000 mortgage products to choose from, according to Moneyfacts, house buyers have plenty of reasons to be confused and concerned.

Current Mortgage Rates

Lenders are employing various tactics to entice house buyers, from cashback to first-time buyer low deposit mortgages. However, with mortgage rate competition low and the BoE rate remaining high, home mover mortgages and remortgages aren’t necessarily seeing a reduction in the cost of borrowing.

Mortgage rates are, however, predicted to fall during 2024, with some experts predicting the base rate dropping to 3% by the end of 2025.

How these predictions will affect the short term and mortgage deals in the next six months remains to be seen.

Speak to a Mortgage Adviser

Navigating the mortgage market remains a challenging process. Speaking to a knowledgeable local Mortgage Adviser is recommended for tailored advice and assistance in finding the most suitable mortgage deal for your needs.

Thomas Oliver Mortgage Broker Vladimir Dolinnij, Leytonstone, Leyton, East London said:

“As interest rates remain high and the mortgage market becomes increasingly complex with a myriad of deals and offers, seeking professional mortgage advice becomes not just valuable, but essential. A knowledgeable mortgage adviser can help you navigate through the maze of options, ensuring you secure the best value for your money in these challenging times.”

Your home may be repossessed if you do not keep up repayments on your mortgage. 


Approved by The Openwork Partnership on 27/03/2024

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