Base rate held

Despite some clamour for an increase to benefit savers the Bank of England’s Monetary Policy Committee has remained steadfast.

Unsurprisingly the MPC also voted to keep Quantitative Easing at current levels.

Jeremy Duncombe, director, Legal & General Mortgage Club, said: “Although the base rate has not moved it is widely accepted that an increase is just around the corner as the economy improves.

"Lenders often re-price ahead of base rate movements and many have already started to increase rates on a number of products in preparation.

"Those that have not already done so will no doubt follow suit. As a result borrowers coming to the end of deals should consider speaking to an adviser and looking for competitive re-mortgage options while they are still available. Historically rates have never been lower so there are still good deals to be had.

"Concerns around affordability in the wake of any base rate rise also seem unfounded despite imminent rate rises. With the seemingly successful implementation of MMR, checks and balances are in place to ensure borrowers are not overstretched.

"Also, with many households enjoying rock bottom rates for a number of years there should be enough wiggle room for them to absorb a reasonable and gradual increase in mortgage rates in the medium term.”

Last month the EY Item Club predicted that interest rates will hit 2.6% within the next three years with the rate increasing to 0.7% in 2015.