Experts do not expect mortgage rates to rocket despite a member of the Monetary Policy Committee signalling a rate rise in spring 2015.
Last week Bank of England MPC member Martin Weale told Sky News the first increase in base rate since March 2009 is likely to be next spring, but that increases after that would be gradual.
Weale’s comments echoed the minutes of this month’s MPC meeting, which said base rate would be “materially” below the 5 per cent average set by the Bank of England prior to the crisis – even when the economy recovers.
Experts are not expecting a huge increase in mortgage rates from the all-time low of 0.5 per cent.
London & Country associate director of communications David Hollingworth says: “We could see some slight lifts in mortgage rates but lenders will have factored this in well in advance so any rate rises would be small and gradual in the medium term.
“Borrowers who want peace of mind will still be better off by fixing their rates earlier rather than later.”
Capital Economics property economist Matthew Pointon says: “We have seen the mortgage market has essentially priced in an expected rise in the Bank base rate around early to mid-2015.
“Now that we have a more firm idea of when the increase will happen, I would expect to see a slight increase in mortgage rates but not a significantly large one.”
Bank governor Mark Carney overhauled his forward guidance policy this month, scrapping the direct link with unemployment to focus on a wider range of indicators.