Interest rates will rise by the end of the year. That’s the prediction being made by many experts despite the Bank of England (BoE) holding interest rates at 0.5 per cent last week.
In the last few weeks, we’ve seen many interest rate cuts from major mortgage lenders and an innovative Rate Matchers deal from HSBC. There are certainly some bargains to be had if you are considering a fixed rate mortgage deal right now.
Francis Ghiloni, a director of the independent mortgage website realpricecomparison.com, told the Daily Mail:
‘It would seem we have reached the bottom for interest rates. The next move, whenever that happens, will be upwards. Borrowers with concerns about mortgage affordability should consider fixing sooner rather than later. The deals on the market now won’t be around for ever.’
The media has been encouraging borrowers to fixed their mortgage rates now wherever possible because, after all, with the interest rate at 0.5 per cent, a record low, the only way from here is up.
Of course the best fixed rate deals are still only available to those with a minimum of a 25 per cent deposit or equity in their home but even those with just 20 per cent are able to fixed their interest rate at less than five per cent and six per cent is available for those with only 10 per cent equity.
For those considering holding on and trying to time the market, they could be playing a dangerous game because further house price falls could eat further into their equity making a good deal more difficult to find in the future.
Mortgage advisors everywhere are urging their clients not to be tempted into a mortgage deal purely by the headline interest rate but to work out the total cost of a deal, including any applicable fees.
