Mortgage holders urged to act now as experts say ‘do not wait’

Mortgage holders have been implored to act now as interest rates are predicted to decrease, despite the Bank of England’s continuous decision to maintain its current 5.25 per cent base rate for a sixth consecutive time amid increasing appeals for it to be finally reduced.

Ben Thompson, deputy CEO at Mortgage Advice Bureau and a renowned mortgage expert, urged homeowners nearing the remortgaging period to start shopping around immediately.

He commented during an interview with Express.co.uk: “March saw an 18-month high in mortgage approvals, with new buyers pressing ahead with their plans.”

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Thompson asserted the importance of getting ready for their mortgage, advising people to consult with brokers and explore the available deals if they’re planning a summer purchase, stating: “With this in mind, it’s right to not wait for the Bank of England to make the first move.”

The mortgage expert predicted that there could be a reduction in mortgage rates over the coming weeks. He explained the reason behind this expectation: “In advance of the Bank of England announcing its first cut, we’d likely see swap rates decreasing with lenders cutting the mortgage rates on offer as a result.”

Furthermore, he pointed out recent patterns supporting his forecast: “In fact, we have seen this over the last week or so, which means we should see fixed mortgage rates start to reduce again.”

Thompson ended on a hopeful note, saying such developments would certainly bring good news to those desiring to remortgage, move into larger homes or enter the property market for the first time.

The analyst hinted at the potential for a base rate drop, noting: “There were positive signs in the voting intentions yesterday, with a second member switching their vote from hold to cut.”

However, they added that policymakers are waiting for clear indicators that inflation is under control before making any moves: “But with policymakers waiting for signs that inflation has been shaken off – there may be some way to go yet.”

They also suggested that the urgency for rate cuts could diminish as the economy strengthens: “Also, once the economy starts to really improve, there is arguably less need to cut rates sharply, so if that news continues to improve, we will still most likely get some BBR reductions, but maybe not too many.”

Recent GDP figures have shown that the UK economy has bounced back in the first quarter of 2024 after a brief recession.

Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, commented on the impact of financial pressures on households: “Personal budgets have been badly bruised by rising bills and high borrowing costs over the past couple of years, with some consumers still struggling with the financial fallout from the protracted cost-of-living crisis.”

She warned against relying on credit for daily expenses and stressed the importance of addressing debt issues: “Using credit to cover everyday living expenses has become the norm for some, which is why troublesome debts must be tackled head-on rather than hoping the problem will just go away.”

Highlighting that financial difficulties aren’t limited to the unemployed, she revealed: “It is not just those out of work facing debt challenges: a fifth of clients in full-time employment seeking debt advice are grappling with a negative budget, where their expenditure exceeds their monthly income.”