Martin Lewis' MSE warns UK households who aren't on 'five-year fixed' mortgage

MSE team issued the warning to UK households over getting the lowest possible rate.

Martin Lewis' Money Saving Expert has issued a "fix now or wait" message to mortgage holders after the Bank of England interest rate decision. The BBC and ITV star's MSE team issued the warning to UK households over getting the lowest possible rate.

MSE says fixed rates could fall a bit further. Aaron Strutt, of Trinity Financial, said: "It seems likely that mortgage rates will continue to edge down for a while, especially with Bank of England base rate cuts expected [later this year]. The money markets have been pricing in future base rate reductions, which means they can offer cheaper deals."

David Hollingworth, of broker L&C Mortgages, also said it was possible more lenders would start offering cheaper fixes "if swap rates don't move against them" (mortgages are indirectly linked to swap rates). Mr Hollingworth added: "The markets have continued to demonstrate more optimism about where the base rate is heading, so we could see the current trend of rate cuts continue."

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Mr Hollingworth added: "So far we haven’t seen any great push to equalise remortgage rates, but they have followed the purchase rates, plus five-year deals dipping below 4% will have pleased those looking for a new rate." MSE explained five-year fixes are cheapest – for now.

Mr Hollingworth said: "Over time, and assuming that base rate does follow the downward path that is expected, we should start to see a shift away from this unusual position where shorter term rates are undercut by longer term options."

The Bank of England now expects inflation to increase to around 2.5% towards the end of 2024, as “declines in energy prices last year fall out of the annual comparison”. This is an improvement on its last prediction in August, when the Bank of England said it expects inflation would hit 2.75% later this year.

The Monetary Policy Committee (MPC) voted 8-1 in favour of holding the interest rate at 5%. One member - Swati Dhingra - wanted to reduce the rate by 0.25 percentage points, taking it from 5% to 4.75%. The last MPC meeting in August saw members voting 5-4 in favour of a cut. The next MPC meeting will be on November 7.