Following this week’s inflation news, specialist BTL broker Mortgages for Business (MFB) has suggested that landlords approaching a remortgage should look to secure a new rate as early as possible.
The ONS has published the CPI figures for July 2023, showing inflation reached 6.8% in July, down from 7.9% in June.
After peaking in October 2022 at 11.1%, inflation in June 2023 saw a significant drop from 8.7% in May to 7.9%, the lowest inflation since March last year.
Despite the fall, continued high growth in prices led to a Bank of England base rate rise earlier this month.
MFB said the latest inflation figures will act as a barometer for the MPC when it meets to review the base rate in September.
The MPC has increased the base rate 14 consecutive times, rising from an all-time low of 0.1% in December 2021 to 5.25% this month.
Gavin Richardson, managing director at MFB, commented: “I expect further falls to the overall inflation rate for the rest of 2023, driven primarily by falling energy prices.
“I think inflation will fall as low as 5% in the final quarter of this year."
Despite this, Gavin predicts the Bank of England will still up the base rate in September.
“If you’re approaching your remortgage, I recommend securing a new rate as early as possible — for some lenders, this can be up to six months before the end of your ERC period.
“If mortgage interest rates decrease, many lenders allow you to switch to a more competitive product should one become available before you complete.
“Either way, you’ll have financial security and confidence that you’re on the most suitable mortgage for your circumstances.
“If you are on a tracker or variable mortgage that follows the base rate, you have time to secure a fixed-rate deal before the next MPC meeting.
“It’s worth exploring your fixed-rate options with a broker to see how much you could save on your monthly payments.
“As long as inflation continues the same downward trajectory, we forecast that the next rise will be the final increase this year.”
