11 Jan

Rate decision 'costs Brits £105m'

Rate decision 'costs Brits £105m'

British mortgage holders will pay an extra £105 million per month as a result of the Bank of England's decision to freeze the base rate of interest.

In what was speculated to have been a knife-edge decision, the Bank's monetary policy committee (MPC) yesterday voted to hold interest rates at 5.5 per cent.

This decision will cost the third of mortgages on tracker rates or standard variable rates £105 million, Ray Boulger of mortgage broker John Charcol claims.

However, according to Mr Boulger the recent drop in swap rates means borrowers can still find a good deal on fixed rate mortgages.

He explained: "Borrowers who prefer a fixed-rate mortgage should see lower rates soon, although so far few lenders have reduced their fixed rates to reflect these lower money market rates."

Analysts are now predicting a cut of 0.25 per cent in the base rate of interest in February.

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