Borrowers nearing the end of their mortgage should ‘consider doing an application now,’ according to mortgage rates.
Interest rates have a significant impact on how much a person will pay on their mortgage, thus achieving a low rate is something that several homeowners strive towards.
The Bank of England’s base rate has remained unchanged at 0.1 percent, which is a new low. However, with the loosening of coronavirus lockdown restrictions and recent increases in UK inflation, there has been discussion about whether the Bank of England’s Monetary Policy Committee (MPC) may raise the Bank Rate soon.
The Bank will wait until its August meeting, according to Matthew Ryan, CFA, Senior Market Analyst at global financial services business Ebury, to provide a stronger indication of future policies.
He did say, though, that interest rate hikes could happen as early as the third quarter of 2022.
He stated the central bank “sounded relatively unflustered by the recent upside shocks in UK inflation” after the MPC’s last Bank Rate decision.
“Policymakers now expect price growth to exceed 3% this year, up from their prior prediction of 2.5 percent, though they reiterated that the increase will be temporary and appear to be in no haste to signal that monetary policy normalization is on the cards.”
“We believe the bank will wait until its August meeting to provide a clearer indication of the future policy path,” he added.
“At this stage, the bank should have a much better understanding of the nature of the inflation increase as well as the impact of the lockdown’s unwinding on economic activity.
“We believe the Bank of England will begin hiking rates ahead of both the Federal Reserve and the European Central Bank, possibly as early as the third quarter of 2022.”
So, how would a possible rise in interest rates affect those who have a mortgage?
Nick Morrey, Product Technical Manager at John Charcoal, spoke with This website about it lately.
He explained that customers who wish to get the “lowest rate feasible” should do a few things.
This starts with defining what they mean by “lowest rate” – for example, whether they mean the lowest rate or the product with the lowest cost over the fixed rate’s term.
“Lenders give with one hand and take with the other, so a cheap rate could come with a big fee.”Brinkwire Summary News.”