Alliance & Leicester: Base rate decision expected

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Alliance & Leicester: Base rate decision expected

Fri 11th Jan 2008

Yesterday's decision by the Bank of England's monetary policy committee (MPC) to maintain the base rate was not unexpected, according to Alliance & Leicester.

The bank said that the choice to hold the rate at 5.5 per cent "has not come as a shock" to those in the financial realm.

Furthermore, Alliance & Leicester suggested that those who are looking to get on the housing ladder stick with the certainty of fixed-rate home loans.

"First time buyers looking for a mortgage deal should consider taking out a fixed-rate mortgage which will give them the security of fixed monthly payments," Alliance & Leicester commented.

It added that tracker mortgages may be a "good option" for other types of homebuyers who may want to take a chance and try to benefit from potential interest rate cuts in the near future.

Meanwhile, Abbey Mortgages' Nici Audhlam-Gardiner cautioned buyers against choosing a tracker mortgage, as the base rate also has the potential to increase in the next two years.

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