10th May 2007
Base rate rise expected
Today’s interest rate rise was probably the easiest to predict, and the relief for many homeowners that it was limited to just a quarter of one percent is easy to see. From my point if view, many of the lenders I deal with had already taken into account the rate rise and we should see little movement in the fixed rate and capped mortgage products available in the market. There will be a flurry of activity from the banks as they re-align their savings and mortgage rates, which will have an impact on those who sit on a standard variable rate mortgage. But it’s not a time to get complacent with borrowing, as even a small rise in the bank base rate could tip someone with large amounts of debt over the edge.
Over the past few months, there have been 4 base rate increases as the Bank of England tries to keep to the inflation target of 2%. The fact that they hit 3% last month and were forced to write to the treasury to explain why suggests that this small increase may not be the end of the treatment.
We now wait to see the impact of this latest rise on the economy and the housing market in general.
Your home may be repossessed if you do not keep repayments on your mortgage. |
