Base rate steady; concerns grow for mortgage holders

The Bank of England has decided to hold the base interest rate at 4.5%. This news brings mixed reactions for savers and homeowners. While savers may benefit from higher interest rates on savings accounts, many homeowners are feeling the pressure as 1.8 million fixed-rate mortgage deals are nearing their end. Finance experts are worried about homeowners who need to refinance. Alice Haine from Bestinvest noted that those with debts or large mortgages are likely to be concerned, as rates aren’t going down as quickly as they hoped. On the other hand, savers are encouraged. With the base rate steady, saving rates may stay higher for longer. Nevertheless, ongoing cost-of-living issues and a frozen income tax threshold could put more financial stress on households. Mark Hicks from Hargreaves Lansdown highlighted that now is a good time for savers to use their ISA allowance before the deadline. However, average interest rates on easy access savings accounts have decreased slightly recently. Rachel Springall from Moneyfacts advised savers to take advantage of their ISA allowances before the end of the tax year on April 5. Meanwhile, mortgage expert Matt Smith from Rightmove indicated that mortgage rates have remained mostly flat. Some lenders are pricing mortgage deals competitively as the busy home moving season approaches. However, fears about rising payments loom for some homeowners due to the end of their fixed-rate deals. Andrew Montlake, a mortgage broker CEO, expects some rate cuts this year, but not significant decreases in mortgage rates. He mentioned that the interest rates used for pricing mortgages are hovering around 4%. Homeowners coming off fixed-rate deals will have varying experiences depending on when they secured their previous rates. Simon Gammon from Knight Frank Finance noted small reductions in mortgage rates and an eagerness from lenders to lend. As the spring marks a new financial year for many lenders, there could be increased competition and further reductions in mortgage pricing.