In response to the strength of economic recovery and increasing house prices, Mark Carney, the Bank of England’s Governor, indicated that interest rates may rise sooner than anticipated, but the “action would be gradual and limited.”
Apparently 2 out of 3 borrowers have variable or tracker rates mortgages, which means a rise in the BOE rate will mean an increase in mortgage payments.
To clarify: anyone on a tracker rate will see an immediate increase, which will be in line with any BOE increase. Increases to borrowers on their lender’s standard variable rate (SVR), are at the lender’s discretion. I am fairly certain that most lenders are absolutely gaging to put their SVRs up, if for no other reason than to be able to increase their saver rates.
It’s defiantly time to start looking at fixed rates if you are still on the SVR, depending on how much equity you have in your home, you can pick a 2 year rate up under 2.5%.
The prospect of an increase has not put off first time buyers - in quarter one of 2014, there were 34% more first-time buyer loans compared to the first quarter of 2013. Home-mover loans were 11% higher for the same period.
Apparently some industry insiders have been calling for a rate rise before the end of the year. Not me!! Tracy (tracker) Gordon.
For more information or to speak to a mortgage advisor contact us on 01628 507477.
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