When the Funding for Lending scheme ends will mortgage rates rise?
There is growing concern that home-owners could soon see the end of rock bottom mortgage rates.
The BoE has announced that a full year head of schedule, the Funding for Lending scheme is to be scrapped for mortgages.
From January 2014 cheap funding will no longer be available to UK lenders, this could mean that next year mortgage rates could significantly rise.
The BoE says cheap funding will still be on offer for the purpose of business loans, but cheap lending for mortgage deals is over. The Bank says it is taking this action as there are signs of a housing bubble and it needs to prevent it from happening.
Ever since the Funding for Lending scheme was launched in mid 2012, lenders have had access to cheap funding which has allowed them to cut rates to historic lows.
Now with cheap mortgage rates on offer there are increasing signs of a property boom and the scheme is no longer needed. The Help to Buy scheme will remain unaffected, and so there is still assistance for those who need help to climb on the property ladder.
If you are coming to the end of an existing fixed rate mortgage term and are concerned about rising mortgage rates, you are advised to speak to an expert for advice and a low rate remortgage quote.
You can speak to an adviser on 0800 048 8828, or alternatively you can make an online search by clicking the red button below.
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