The Bank of England (BoE) hiked the base rate by 50 basis points to 3.5% this lunchtime but LMS chief executive Nick Chadbourne says “there is still no need for mass panic”.

The latest rate increase marks the ninth hike this year and the highest level since the financial crisis 14 years ago.

Chadbourne explains: “The rise has already been priced into the money markets so it shouldn’t impact new mortgage products. Homeowners need to bear this in mind and know that there are still options available to help them find products and rates most suited to their needs.”

However, he expects the latest increase to affect standard variable rates (SVRs).

He says: “The remortgage market has slowed in recent weeks as the difference between SVRs and new products is nominal so borrowers are waiting to see if product rates drop further. They will indeed drop, so this is to be expected.”

“But, with SVRs now likely to increase again, this will no longer be the case, so the thought of unknowingly dropping onto such a rate will become unfavourable once more. This will inevitably drive increased market activity as we head into 2023.”

MPowered Mortgages managing director of mortgages Emma Hollingworth says today’s decision may not be “as severe as anticipated” for the mortgage market.

Hollingworth suggests swap rates “are telling a much more positive story, providing further reassurance that the market is recentering after a turbulent period”.

She adds: “Nevertheless, with the cost-of-living likely to remain high for the foreseeable future, it is important that the industry continues to work together to support homebuyers by keeping rates as low as possible at this time, whilst doing their utmost to ensure the mortgage journey is as smooth and efficient as it can be.”

SPF Private Clients chief executive Mark Harris says he doesn’t believe rates “need to, or can go, much higher”.

Harris explains: “Fixed rates are influenced by future base rate movements and therefore not directly linked to what is decided this week.”

“Indeed, the pricing of fixed-rate mortgages, which soared after the mini-Budget, continues to drift slowly down, with five-year fixes breaching the 4.5% barrier this week and expected to drop below 4% in the new year. Come 2023, we could see five-year fixes priced below the base rate.”

However, he notes that those on base-rate trackers will find their mortgage rate increase by 50 basis points and monthly payments will go up accordingly.”

Meanwhile, Primis proposition director Vikki Jefferies says the rate rise today was “unsurprising given inflation continues to rise”.

“With the Bank of England’s financial stability report revealing that approximately a third of mortgage holders are expected to face monthly repayment increases of over £100 by the end of next year, support for homeowners, and in turn brokers, will be ever-important.

“However, some borrowers can take comfort in the fact that markets have largely anticipated and priced-in rate rises already – in fact, we’ve seen an increasing trend of lenders reducing the rates on fixed mortgages.”

Mortgage Advice Bureau head of lending Brian Murphy adds: “Recent weeks has seen significantly more new mortgage borrowers opt for tracker rates as pricing between headline tracker and fixed rates has typically been in the region of 100 basis points or more in favour of trackers.”

“Many would have expected the rise announced today by the BoE of 0.5% but as a consequence of today’s announcement more borrowers may once again feel fixed rate products offer better value.”

Leeds Building Society director of products Matt Bartle says: “Although we may see some potential buyers temporarily holding back on entering the housing market until economic conditions stabilise, we expect their desire to get on the housing ladder to remain.”

“This will continue to underpin demand for housing. Despite the current worsening economic outlook, the UK housing market has previously proven itself to be resilient and adaptable to rapidly evolving market conditions. It has survived economic shocks before and we are confident that it will do so again.”