Mortgage Renewal - Do I wait until the 19th December announcement?

JulieBirdLeicester

Hia,

I fell foul on my last Mortgage Renewal because I stupidly didn't choose a 5 yr fixed plan when the mortgage rates were seriously low a couple of years ago (I didn't even realise they were low), so I'm now super alert to watch interest rates and inflation a little more carefully moving forward.

So my question is: My Mortgage is up for renewal on the 31st December, and I am going to stick with my current lender as I have compered their current rates for mortgage re-offers and they are pretty much the same as the compere market sites, with the added benefit that I can switch quickly without any re-evaluations/legal fees etc.

'However, I understand that on the 19th of December the Bank Of England will announce whether interest rates will be cut/increased and this may effect mortgage rates?

Am I best to wait until then to switch, is there a feeling that they will lower interest rates before I lock in again?

I know this is looking into a crystal ball, but any thoughts as I am not sure what to do, thanks :-) 

born_again

Do you feel brave?

Given the inflation rise this month. I personally would not expect a cut in December, but have been wrong before.🤦‍♀️

Even if there was a cut, banks may not change anything till new year anyway, while they digest how things are going, especially given the christmas holidays.

If you are with Barclays, they are announcing a 0.2% cut on some products tomorrow. Will others follow suit???

JulieBirdLeicester

Thanks @born_again

This is helpful, that was going to be my next question in regard to how quickly mortgage companies change their rates after Bank of England announcement, if this is true then I guess I have nothing to lose by locking in before then cos if it goes down I won't benefit, but if it goes up I will 

This is totally rubbish isn't it lol

ACG

You will start to see interest rates moving a week or 2 before the base rate announcement if they are expecting a change. 

But you also need to look at when you need to switch products by. Some lenders have a cut off point, if you do not do it in enough time you could find you end up on SVR for a month. 

kingstreet

New product rates don't reflect the BOE base rate. Such movements have been factored-in to products weeks earlier as products are based on swap rates, not base rate.

As an example, following the last base rate reduction, product rates have and still are increasing.

400ixl

Mortgage providers predict the fixed interest rate movements and build them in before the announcements by the Bank of England. They don't really react after the fact like you see with bank savings account rates.

Its only the tracker rates which follow the BoE rate changes closely after the change.