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Bank freezes interest rates

08 June 2007
The Bank of England's monetary policy committee (MPC) has voted in favour of keeping interest rates at 5.5 per cent.

After the 0.25 per cent increase which took place on May 10th, the fourth such increase since August 2006, June's rate freeze will come as welcome relief to many mortgage holders.

However, the Council of Mortgage Lenders (CML) has urged homeowners not to be complacent, especially those who are coming to the end of fixed-rate mortgage deals.

"More than two million borrowers over the next year and a half will reach the end of fixed-rate deals, and will face the prospect of higher mortgage payments," CML director general Michael Coogan explained.

"For most people, the scale of the increase will be manageable. But it makes sense for borrowers whose fixed-rates will end soon to start planning ahead now, and to recognise that their monthly costs will be higher in the future."

According to CML estimates, a two-year fixed rate mortgage of £114,000 ending later this year would have generated an additional £102 a month with the recent rises in interest rate.

Find out more about a fixed-rate mortgage

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