Industry News: Could positive GDP news delay a BoE reduction, what that means for your mortgage rates.

Financial Reporter

GDP returns to growth - could the Bank of England delay a rate cut?

“GDP growth was higher than the 0.2% predicted for May.” Click to read original article >>>

Current mortgage rates assume a reduction of 0.25% in the Bank of England rates in the last quarter of this year. This is widely assumed to be likely and lenders buy interest rate swaps, which in turn are priced based on assumptions about future rates. As those assumptions change, so do the prices for these swaps and in turn the mortgage rates you are offered for fixed deals.

Simply put, should the likelihood of a BoE base rate drop fall, then mortgage interest rates for new products will increase.

If this starts to become more likely then you are strongly advised to secure a deal now as we might see another uptick in rates as this develops.

Picture of Author: Stuart Phillips

Author: Stuart Phillips

Fully CeMap qualified, Directly Authorised by the FCA and with over a decade of experience, Stuart has a wealth of experience in both specialist BTL and residential mortgages.

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