Alliance and Leicester comments on today's MPC decision to maintain base rate at 5.75%

Stephen Leonard, Director of Mortgages at Alliance and Leicester, said:

"It has been 12 months since the Bank of England started to put rates up after a year long run of maintaining them at 4.50%".

"With rates now more than one per cent higher than this time last year, this pause will come as a welcome break for homeowners and borrowers".

""It was widely anticipated the rates would remain at 5.75% for August, especially after the quarter per cent rise last month and continued uncertainty within the financial markets over the funding of leveraged buy-outs, stock market volatility and the potential losses that are now emerging out of the US non-conforming mortgage market".

""For borrowers with high levels of affordability, tracker mortgages continue to offer good value in the current interest rate environment".

"We would have to see another one or two rate increases for tracker mortgages to reach the current rates offered on many fixed products".

"However, borrowers opting for a tracker mortgage need to be financially comfortable enough to withstand an increase in monthly payments should there be any future rate rises".

"Alliance and Leicester has a competitive 2 year base rate tracker priced at 5.44% and we have a very competitive low-start 2 year fixed rate at 5.34%".

"We also have excellent FeeSaver deals which are ideal for first time buyers who want to minimiseup-front fees.".

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