Interest rates to remain static...for the moment!

February 14, 2018

At the Bank of England’s Monetary Policy Committee meeting on the 7th February, the decision was made unanimously to hold the base rate at 0.5%. However, the minutes from the committee meeting do suggest that we are on the verge of seeing a quicker and sharper rise in interest rates than had previously been considered likely.

Mark Carney, the Governor of the Bank of England discussing inflation said “In order to bring it back to target over a more conventional horizon, which means moving it in from that three year horizon that it will be necessary, likely to be necessary, to raise interest rates to a limited degree in a gradual process but somewhat earlier and to a somewhat greater extent than we thought in November.”

An interesting point to note from the Committees minutes were that ‘inflation running above 2% for the next three years was something they were no longer prepared to tolerate’.

The Bank of England is always very clear and precise in the wording of its statements and never says a single word out of place. Everything here gives a knowing nod to a potential rise in interest rates with economists suggesting the first of which could be as early as May when the next inflation report is due.

 

As such now may be an excellent time to start planning your finances around potentially higher mortgage payments if you still have a variable rate mortgage, or perhaps consider the viability of a fixed rate product to secure a good rate whilst they are still available.

 

You may have to pay an early repayment charge to your existing lender if you re-mortgage

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    Abode Mortgages Limited is an appointed representative of Stonebridge Mortgage Solutions which is authorised and regulated by the Financial Conduct Authority. Abode Mortgages Limited is a company registered in England and Wales with company number 9311195. The registered office address is Certax Accounting, 76 Park Street, Horsham, West Sussex, RH12 1BX. Our initial mortgage consultations and quotes are free with no obligation to you. If we act on your instructions to apply for a mortgage, we charge a broker fee for arranging and processing the mortgage for you. The fee will be dependent on your circumstances but will not exceed £495. This fee is only payable when we submit a mortgage application to the lender.Your home may be repossessed if you do not keep up repayments on your mortgage.

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