The Mortgage Advice Bureau (MAB) has reported that, following the publication of the Bank of England’s Inflation Report on 13 May 2015, the Bank of England’s historically low base rate of 0.5% is expected to be held at its current rate until the second quarter of 2016. This news is likely to be well received by those looking to secure a mortgage in the second half of 2015, considering that mortgage rates continue to be held at record lows and with mortgage approval rates forecast to rise. Further, the combination of competing market lenders and 0% inflation means that borrowers are likely to be able to obtain some very attractive offers in the coming months.
Commenting on the report and looking ahead to the likely eventual rise in the second quarter of 2016, Brian Murphy, head of the MAB stated that, “Today’s report brings a double dose of good news for anyone seeking a mortgage in the second half of 2015, with approvals forecast to rise while borrowing costs remain low. There are a record number of products currently available on the market. One year on from implementing the Mortgage Market Review (MMR), competitive pricing is essential for lenders to stand out from the crowd. Looking beyond the next 12 months, borrowers will be reassured that the Bank remains committed to gradual changes when the base rate eventually rises. This should protect borrowers from any shocks and give them plenty of time to adjust their finances”.
In the short-term, prospective borrowers are likely to be able to gain some very attractive offers in the market, whilst in the long term, existing borrowers are likely to be relieved that any changes to interest rates are expected to be gradual.