Mortgage rates should fall following the Bank of England's decision to keep its key interest rate on hold, brokers say.

So far the response has been muted, with the Nationwide the only major lender to reduce mortgage rates since the Bank's announcement was made.

Brokers expect more competition among lenders in the coming weeks.

But they warn that changes are likely to be slow, with little prospect of the Bank rate being cut in the near future.

The Monetary Policy Committee's decision to hold the bank rate at 5.25% was somewhat of a surprise, with many analysts expecting a 15th consecutive increase.

It will bring immediate relief to 1.4 million people on tracker and standard variable rate (SVR) deals who have been seeing regular increases in their monthly repayments.

Even after rates were held, compared with December 2021, those on a tracker mortgage are paying £540 more a month, or £299 more a month on a SVR.

Around three-quarters of mortgage customers hold fixed-rate deals. Banking trade body UK Finance says there are about 800,000 of these deals ending in the second half of 2023, and about 1.6 million expiring next year.