Commenting on the news that the MPC has left the bank rate unchanged, Boulger said: “The publication of the much-discussed poll in last weekend’s Sunday Times caused a sharp fall in both sterling and gilts on Monday, as the likelihood of a hung parliament began to creep further into the overall equation. One thing markets hate is uncertainty and a hung parliament would clearly bring that.
“This kind of market reaction cannot be ignored when considering future mortgage options. The economic arguments continue to suggest a tracker mortgage is the right choice for most borrowers because the economy is in such a mess that very low interest rates are here for some time yet. Yet the election cannot be ignored. The markets have been expecting a Conservative majority and what once looked like a foregone conclusion is now not so certain. This may have a negative effect on fixed rate pricing.
“The message for borrowers is simply that no generic advice will do. The political uncertainty may mean the right choice for some borrowers is to batten down the hatches and lock into a fixed rate for at least five years, but with the difference between these and the best tracker mortgages around 2.5%, there is a big premium for the security of a fixed rate. Seeking independent mortgage advice on your own specific situation has arguably never been more important.”
