The Bank of England has voted to hold the base rate at 0.5% with a 6-3 MPC split, indicating that the rate could rise in August.
Three Monetary Policy Committee members, including the Bank’s chief economist, Andrew Haldane, voted to raise rates to 0.75%. Governor of the Bank of England Mark Carney voted to hold rates at 0.5%.
Vikki Jefferies, proposition director at PRIMIS and PTFS, said: “Speculation around a baserate increase has dominated financial pages since the start of the year.
“The majority of commentators agree – a rate rise is not an if, but a when. While uncertainty remains around timescales, brokers need to start seeing this as an opportunity to reengage with their back-books.
“Demand for remortgages is already strong – as the latest UK Finance figures showed – and now is the prime time for brokers to further drive these conversations with the numerous borrowers who are approaching the end of their fixed rate, or who have already reverted to their lender’s SVR.”
June 2017 was the last time three people voted against the overall view and rates then rose the following November.
The Committee said: “A key assumption in the MPC’s May projections was that the dip in output growth in the first quarter would prove temporary, with momentum recovering in the second quarter. This judgement appears broadly on track.
“A number of indicators of household spending and sentiment have bounced back strongly from what appeared to be erratic weakness in Q1 [January to March], in part related to the adverse weather. Employment growth has remained solid.”
Kevin Roberts, director, Legal & General Mortgage Club, said: “Today’s result is expected, but will still no doubt bring a quiet sigh of relief for borrowers; further extending their opportunity to lock into low rates whilst they are still available.
“Even if a rise takes place soon, it shouldn’t detract us away from the fact that rates are at a near all-time low.
“For those who are concerned about affordability, speaking to a mortgage broker will help consumers take full advantage of the extensive product choices on offer, as well as providing advice completely tailored to their individual financial circumstances.”
Ishaan Malhi, chief executive and founder of online mortgage broker Trussle, added: “The Bank of England has chosen to sit tight today but another rate rise is looking imminent, and will likely affect mortgage rates.
“Historically we’ve seen lenders begin increasing their rates in the weeks leading up to an anticipated base rate rise. This means that if the Bank of England acts in August as predicted, we could see mortgage interest rates start to shift upwards as early as next month.
“Any homeowners nearing the end of their introductory mortgage period should start looking for a new deal as early as possible, so they don’t get caught out by more expensive borrowing.
“When making a decision on a mortgage, it’s important to consider the true cost of a deal, accounting for all fees and charges, rather than going on the headline rate alone.”