Experts have warned that the mortgage interest rates may still rise, even though the Bank of England base rate remained at a low 0.5%.
The decision announced by the Bank of England not to increase the base rate seemed like positive news for mortgage holders and those in the industry. However, a warning was contained in the minutes of the meeting held by the BoE Monetary Policy Committee, stating:
“Banks’ funding costs, an important influence on mortgage rates, had risen since May and it was possible mortgage rates would shortly begin to rise.”
In addition to the warning, it is believed by the Bank of England that growth of the economy during 2015 will surpass the previously predicted 2.5% and will be closer to 2.8%, although the Bank has lowered its estimate of employment growth this year. It was suspected that three members of the Monetary Policy Committee would vote to increase the Bank of England base rate, although only one member actually voted in favour. The lone supporter, Ian McCafferty, was previously the chief economist for the Confederation of British Industry.
Although the news that the base rate would remain stable was welcomed in the industry, experts still advise those who are considering switching to a new deal or buying a property to do so now before the interest rates increase. Mortgage advisers who have undergone CeMAP training have the relevant information to help buyers choose the most suitable mortgage for their circumstances.