The Bank of England (BoE) has held its base rate at 0.1% despite expectations that there could have been a rise.
The BoE’s Monetary Policy Committee (MPC) voted seven to two in favour of keeping the rate where it stood.
John Goodall, chief executive of Landbay, said: “The ‘will they, won’t they’ scenario of the past few days in anticipation of whether the Monetary Policy Committee would raise Bank base rate is emphasised by the differing views of the MPC members.
Ultra-low mortgage rates are declining
“There is still uncertainty in the economy and we should know a bit more in the new year. I think we are looking at January now for the rate increase as December and the run up to Christmas is probably not the best time. I believe base rate will go up to 0.25% with possibly a couple more rate rises in 2022 to take it up to 0.75% this time next year.”
Reece Beddall, sales and marketing director at Bluestone Mortgages, added: “Although a rise in interest rates looked on the cards, today’s decision comes as welcome news to both prospective and existing borrowers.
“However, low interest rates can’t last forever, and looking ahead, the challenge will be how we can best support the growing number of customers who find themselves in difficult financial situations.
“As an industry, it is our moral obligation to signpost these customers to the best available options so that they, too, can have the opportunity to climb on to or up the property ladder and achieve their homeownership dreams.”
Kevin Roberts, director of Legal & General Mortgage Club, said: “Despite growing pressures to tackle rising inflation, it is encouraging to see today’s decision not to raise the UK base rate.
“Amidst unwinding government support, helping to keep borrowing costs to a minimum will support people across the UK by ensuring their mortgage and credit repayments remain at historic lows.
“Whilst a low rate should keep the market competitive, for those worried about the future of their mortgage, along with those simply coming to the end of their existing mortgage term, the key now is to seek advice. Mortgage advisers are on hand to help clients secure the best possible mortgage for their individual needs.”