Low interest rates benefit UK mortgage rates.
UK mortgage rates have benefited from low interest rates. It is 3 years since the BOE first cut the base rate to it's record low level which has been fantastic for home-owners, particularly those on tracker UK mortgage rates.
Savers have not been so fortunate though. Those trying to live on savings face declining income levels because inflation races ahead of rates, according to Ros Altmann at Saga.
So has the Bank of England been right to leave interest rates at 0.5 per cent for so long?
According to Howard Archer, chief UK economist at IHS Global Insight the answer is yes the BOE has been right. He commented saying that the BOE has been justified in its decision to keep interest rates down at 0.5 per cent. He added that he believes that it should stay at such a low level for considerably longer, barring a marked and sustained pick-up in UK economic activity.
Adrian Coles who is director general at the Building Societies Association is also in agreement. He adds that the BOE had little option but to keep the base rate low. The low bank rate has been great for mortgage borrowers who have benefited from low UK mortgage rates. He does however acknowledge that the low base rate environment is also a challenge for business and savers.
Those looking for the best UK mortgage rates should contact Deal Direct, we are 'whole of market' brokers and can search through all lenders offers on your behalf to find the best rates available.
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