The Bank of England Governor Mark Carney has confirmed that although unemployment is fast heading towards its trigger point of 7%, lack of growth in other sectors of the economy means the Bank of England base rate is unlikely to rise when it finally does hit 7%.

He did say that when rates do eventually start to increase, the base rate will only rise gradually and even when the economy returns to normal it is likely to be substantially below 5%.

Mr Carney said that the recovery means that by around 2017, the bank rate will settle somewhere between 2 and 3%.

Social media, the press and other market commentators immediately picked up the headline of “Rates rising 6 fold in 3 years,” but as I pointed out to the younger members of staff at Mortgage Required (some of whom were still at school 5 years ago when rates fell to their all-time low!) 6 x ½% is still only 3%!

Anyone who had a mortgage in the early 90's will remember the pain of interest rates around 15%, so I am sure they will eat 3% up for breakfast!

From next month, new regulations will mean that lenders will need to factor in rises in interest rates when they agree new applications, so in theory a 6 fold rate increase should not really hurt anyone.

His comments will no doubt mean mortgage borrowers will edge towards fixed rates, which are still extremely competitive. It may even wake up borrowers on “lifetime trackers” who have been paying naught point didly squat in interest for 5 years. Be warned, 0.5% will not last forever!

For more information or to speak to an adviser contact us on 01628 507477.

Recent posts

The most wonderful time of the year can easily turn into the most expensive time of the year. Watching the pennies doesn’t mean that the Christmas festivities have to stop, following a few budgeting tips can mean you still have a special Christmas and don’t go into the new year in debt.  

December is usually a less desirable time to buy as many people don’t want to move over the holidays. However, prospective buyers do start to look at this time. Selling your home in winter may require a bit of extra attention to showcase your property at its best.

We look at why mortgage rates increased following the Bank of England's choice to reduce the bank rate, and should you fix now?

On 30th October 2024 the Chancellor, Rachel Reeves delivered the Autumn budget which we had previously been warned would be “difficult”. Below we have summarised the main housing points.

In an increasingly cashless society, money is an intangible concept for children to grasp. In the days of coins and notes, kids could see money as something physical you require to purchase goods and services.
In order to help teach your children about money, we have listed some tips below;

The UK’s chancellor, Rachel Reeves will deliver the Labour government’s autumn budget at the end of the month, we take a look at what could be announced in relation to housing.

Recent research from Halifax has revealed the most sought-after locations for first time buyers in Britain.  

The data which was taken from the Halifax House Price Index looked at areas outside of London where those looking to purchase their first property were buying. Despite high property prices and increased rates, these first time buyer hotspots have remained popular.   

Taking care of your mental health means looking after your emotional, psychological, and social wellbeing. There are several ways we can practice self-care that will help to improve our physical and mental health. This can help to reduce our risk of illness, manage stress, and boost our energy levels!