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The cost of borrowing money on a variable or tracker rate home owner loan has remained the same this month as it was last month, following the latest decision from the Bank of England’s Monetary policy committee (MPC).

In their regular monthly meeting, which was held yesterday (Thursday 9th December), the MPC voted to maintain the current level of interest rates for loans and savings accounts, at 0.5 per cent for yet another month.

After speculation about increasing the current level of quantitative easing it was also decided that this would remain on hold at the current level of £200 billion, following more optimistic figures regarding the state of the economy in the UK.

The base rate of interest for loans has now been unchanged for almost two years, with December becoming the 21st month without any alteration to the Bank base rate.

Furthermore, the Bank of England have suggested that it seems likely that the cost of a home owner loan will remain unchanged due to interest rate increases, for at least another twelve months and possibly even into the following year.

Although interest rates seem likely to remain low for some time to come, it would be wise for borrowers to overpay on their home owner loan wherever they can, in order to reduce the outstanding balance of their loan before rates do eventually rise.

Ben Thompson at Legal & General said “In amongst the bad weather and other adverse news, there has been some great manufacturing results and some positive noise in terms of Christmas spending, however nothing like enough to provoke any discussions about rate changes.”

“The Bank’s Christmas present to us all this year is not to raise the cost of borrowing, and it probably won’t in 2011 at all.”