How do mortgage rates compare to the Bank of England base rate?
Financial experts suggest the movement of mortgage rates can give an indication of how the Bank of England base rate might move.
We are seeing individual lenders increase their standard variable rates, yet the base rate remains at 0.5%. Some figures suggest that the average cost of mortgage products has been falling. So what is really happening?
In its simplest form, low interest rates are set to encourage growth in the economy, the base rate is raised to control inflation. Lenders rates generally track this movement but as we have been seeing lenders have been independently raising their standard variable rates.
Recently published statistics suggest that over the past year the average mortgage rates for a 5 year fixed-rate loan have fallen from just under 6% to 4.86%. The difference of just over 1% can have a big impact on your monthly outgoings so it is worth checking the market if you are on a higher rate.
Some financial experts are suggesting that the Bank of England base rate may not rise until 2014 and perhaps not for another three or even five years. The basis for this prediction is that there is unlikely to be enough improvement in the UK economy to allow interest rates to rise.
As whole of market brokers Deal Direct are constantly checking mortgage rates throughout the wide range of lenders products. Our professional advisers are aware of the varied lending criteria and all the details that need to be considered to compare products. Call Deal Direct for impartial advice and secure the best deals in the marketplace.
