On Thursday 21st September the Bank of England made the decision to keep the bank rate remaining the same at 5.25%. This came as a relief to those thinking it may increase for a 15th consecutive time.
When will interest rates go down?
Despite there being a Bank rate pause, it is still at its highest level for 15 years. Raising interest rates means it is more expensive to borrow money, therefore, people have less to spend which in turn reduces demand and therefore inflation.
Policymakers will be looking closely at the “core inflation” rate which is a measure on food and energy which went from 6.9% in July to 6.2% in August.
Andrew Bailey, governor of the Bank of England said: “we have not had any discussion about reducing rates, because that would be very, very premature. Our job is to get inflation down.”
How do interest rates affect me?
High-interest rates mean house buyers and those remortgaging will have to pay a lot more currently due to rates being much higher compared to previous years.
There are 1.4 million people on tracker and standard variable rate (SVR) deals – these people usually see an immediate change in their monthly payments. Around 75% of mortgage customers have fixed-rate deals. Lenders may now have some confidence to lower mortgage rates, despite them being much higher than the last 10 years.
Why have rates been increasing?
It is not just the UK that has been increasing interest rates, although they have one of the highest rates across the world. Inflation has been fairly high worldwide following Covid restrictions being lifted and consumers spending more.
Businesses experienced issues getting goods to sell, oil and gas costs were higher than they had been previously, which was made worse by Russia’s invasion of Ukraine. There aren’t just global elements that have caused an increase in rates, there have been other factors in the UK, including rising wages.
Yesterday
Skipton Building Society launches ‘Delayed Start’ mortgage meaning first time buyers won’t be required to make repayments for the first three months.
According to a survey by Skipton, first time buyers who bought their home in the last five years found that in the first three months of living there, they were spending upwards of £30,000.
6 days ago
If you have recently moved into a property with a garden that requires a little TLC, or you’d like to get on top of your current green space, check out our tips.
9 days ago
High street lender, NatWest, have launched a new product to help first-time buyers purchase a property with assistance from a family member or friend to get them on the property ladder sooner.
10 days ago
‘Buy Now, Pay Later’ (BNPL) schemes, such as ‘Klarna’ are short-term loans that allow shoppers to make a purchase, but delay paying for it for an agreed amount of time.
Klarna is one of the most popular BNPL services with 18 million customers in the UK alone, and offers interest-free payment options which is appealing to shoppers. However, does it affect a mortgage application?
15 days ago
We look at how to get the best Buy to Let mortgage rate, what's in store going forward, and options as a landlord with increasing costs.
24 days ago
Throughout this past week, lenders have continued to reduce their mortgage rates giving borrowers in the UK some welcome news following the change in global tariffs under US President, Donald Trump.
24 days ago
Did you know that buying a house, or relocating is in the top 10 most stressful life events?
Stress of course is an unavoidable part of life and there are many reasons why people experience stress, not just buying a house!
There are lots of effective ways to manage and reduce stress, check out our tips to help you.
With the stamp duty relief ending in England and Northern Ireland, we have listed the top 10 cheapest areas for first-time buyers as published by Rightmove.