9:37 AM, 29th October 2021, About 2 years ago
The Bank of England Base Rate is currently at an all-time low at 0.1% and this has led to mortgage rates being at all-time lows. Interest rates change over time, just over 30 years ago the Base Rate was 14.88%, but for the last decade, it has been 0.5% or below.
However, all of this might well be about to change, for a number of reasons.
The Bank of England has warned that inflation will rise to close to and even above 5% early next year. Higher rates of inflation typically result in higher interest rates. The Governor of the Bank of England has recently said it will have to act over inflation
The market is strongly predicting a rise in the bank rate from the current 0.1% to 0.25% this year and then to 0.5% early next year and 0.75% later in the year. This will almost certainly kick-start a steep and swift increase in mortgage rates.
SWAP rates are a mechanism that lenders use to set their 2, 3, 5 and 10 year fixed rates. These rates are all rising and this will lead to increased fixed rates.
A survey recently conducted by Barclays has found:
Now is the time to review your mortgage before costly increases take place. A number of lenders are relaxing their acceptance criteria, others are offering free valuations and legals or cashback.
Don’t wait until it is too late, contact Brooklands today to get a free initial appraisal.