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Big freeze lasts all year, but cut is imminent, says Charcol

Ray Boulger of Charcol comments on yesterday&#39s base rate freeze, which leaves the base rate on hold for a whole year at 4%.

Boulger says: “Base rate was widely tipped to be cut yesterday, particularly with the Federal Reserve announcement on Wednesday, but the decision was always going to be a close one. Despite this month&#39s &#39no change&#39 decision, a rate cut may still be on the agenda for the near future.

“House price inflation is beginning to show signs of cooling off, with the Nationwide reporting a slow down for October. This is likely to be in the forefront of the Bank of England&#39s mind, who have relied heavily on the housing market to revive the economy. We predict that this house price inflation slowdown will continue into the New Year, and a base rate cut next time around could be helpful in preventing the increase in house prices from slowing down too quickly.”

Despite no change, the historically low base rate continues of course to be great news for mortgage borrowers. As there is still a strong likelihood of a rate cut in the near future those on base rate trackers may yet have cause for celebration. However, a low interest rate environment puts the squeeze on savings rates, so, for the sake of their wider financial circumstances, Charcol belives it is even more important for borrowers to make the most of potential cost-savings on their mortgage payments. For example, borrowers on flexible mortgages should consider overpaying on their normal monthly payments where they can and therefore reduce their mortgage debt and shorten their term.

Those borrowers still on standard variable rates are urged to switch or remortgage to a competitive rate. Rates are now so low (on both floating and fixed deals as fixed rates have already factored in a potential future cut) that even borrowers who have some redemption penalties on their deal may still find that the potential savings outweigh the costs.


Business issues move centre stage for CBI conference

This year&#39s CBI National Conference, taking place from Sunday November 24 to Tuesday November 26 at the Manchester International Convention Centre, will cover issues including international economic prospects, the reputation of business, public services reform and &#39added value&#39. Chancellor Gordon Brown and US Treasury Secretary Paul O&#39Neill will address the state of the economies on […]

Conference tackles the big issues

Delegates learnt the best way to balance high demand with quality customer service at last week&#39s Mortgage Strategy on Best Practice in Mortgage Processing conference. Some of the industry&#39s best-known names gave their view on subjects as diverse as improving broker/lender communication and the role of technology. Opening the two-day event last Monday at London&#39s […]

Jim White&#39s Mortgage Solutions and mortgageforce join forces

Jim White&#39s Mortgage Solutions and mortgageforce have combined in a national distribution and fulfilment deal. As part of the new arrangement, mortgageforce mortgage advisers will visit Jim White&#39s Mortgage Solutions clients who want a face-to-face meeting in their own homes, thereby complementing Jim White&#39s telephone and Internet-based services. Both companies expect this personal service will […]

Buy-to-let market is buoyant but cautious, says ARLA

The Association of Retail Letting Agents has found that the buy-to-let market is buoyant but cautious, based on its Survey of Trends among the ARLA panel of mortgage lenders. The average monthly total of actual loans for buy-to-let investment rose by 30% compared to the previous six months. However, the average loan at £82,141 was […]


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