Mortgage blog: Why your tracker-rate loan is unlikely to get more expensive in 2014

Posted 1 November 2013

Do you have a tracker rate mortgage? If so, then you can expect your payments to remain steady next year. That's the view of the Bank of England's chief economist, Spencer Dale, who believes that economic conditions in the UK are unlikely to improve enough to merit a rise in interest rates in 2014.

Mr Dale is one of the nine members of the Bank's Monetary Policy Committee who set interest rates in the UK. His comments suggest that variable rate mortgage holders are set to continue to reap the benefits of a record low base rate.

Tracker rate mortgage holders set to see payments remain static until 2015

In a question-and-answer session on the social network website Twitter, Mr Dale said the UK would need to see sustained growth before interest rates rise from their current level. The Bank of England base rate has been at its record low of 0.5% since March 2009.

The BBC reports that "as might be expected from a central banker, Mr Dale gave little in the way of surprises in his answers on current monetary policy".

Keith Osborne, editor of, says: "One of the first steps taken by the incoming governor of the Bank of England, Mark Carney, was to suggest that interest rates won't rise until the unemployment rate in the UK falls to 7%. This was expected to be sometime in 2016 but could be sooner if the economic recovery is faster than expected. What this means is that anyone with a tracker rate mortgage can expect their repayments to remain at their current level for at least another year."

"A healthy housing market is good for [the] economy"

At its latest meeting, the Bank's Monetary Policy Committee (MPC) said it would make no change to the £375bn of monetary stimulus it is providing through its quantitative easing (QE) programme.

The initiative has been criticised by some experts for helping banks gain access to cheap money rather than helping the wider economy. In his Twitter Q&A, Mr Dale was asked "is quantitative easing a necessary evil? What will be the implications on the UK's macroeconomic objectives?" Mr Dale replied: "QE not evil. Has helped to support economy and protect jobs."

Mr Dale was also asked about the government's new Help to Buy scheme which gives first-time buyers and home movers a wider access to mortgages with just a 5% deposit. He said: "A healthy housing market is good for economy. But watching carefully for overheating."

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