While for many savers, the end of the low interest rate environment can’t come soon enough, for those of us with borrowings 2014 could be the last chance to really take advantage of the record low rates available on mortgages and other finance products.
The January 2014 figures for unemployment recorded a shock fall in the number of people out of work to 7.1%. This is now perilously close to the Bank of England’s 7% threshold for the consideration of a base rate increase.
The Monetary Policy Committee, who hold responsibility for setting interest rates in the UK, have been keen to point out that a breach of the 7% unemployment threshold will not automatically cause an increase in interest rates, however, given the improving state of the UK economy, it would seem reasonable to assume that we will see a base rate increase at some point in the coming 18 months.
Providers will soon start to “price in” this increase in interest rates, which will make the cost of mortgage finance higher than it has been previously. The current range of mortgage deals could well be the best we will ever see and it would make sense to lock into an attractive deal now to avoid the shock of a sudden rate rise.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
