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Base rate stays at 0.5%

8 October2009

Today at midday, the Bank of England`s Monetary Policy Committee (MPC) confirmed that it would maintain the official base rate at 0.5% for at least one more month.

The decision, which was widely anticipated by analysts, is good news for many people.

For example, many homeowners with tracker/variable-rate mortgages will keep on paying less than they originally expected towards their mortgage every month, effectively `freeing up` money they can use to keep on top of their other financial commitments.

Homeowners with fixed-rate mortgages, however, have not benefited in the same way, as their mortgage payments aren`t affected by changes to the base rate. As a result, they`re not likely to be as interested in the base rate decision.

A mortgage expert for Think Money said: "When the base rate does rise, we may see more people with tracker or variable-rate mortgages struggling with their mortgage payments. Anyone who finds themselves in this situation should speak to their mortgage provider and find out what they could do to help them stay on top of their mortgage."

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Tags: base rate, mortgage, tracker rate mortgage, variable rate mortgage, fixed rate mortgage, bank of england

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