After the past few months, many of us are wondering how the Bank of England will react against the current economic climate and how we can plan ahead for consistent rises.
The reality of low interest rates is now over, and at 12 pm today, the Bank of England announced the latest interest rise of 4%, rising a further 0.5%.
For the past 10 years, the interest rates have been incredibly low, sitting between 1-2% because of government decisions and the economy, however, as inflation rises, the Bank of England has decided to raise the interest rate for its 10th successive time.
The 50bps or 0.5% rise from the 3.5% rate in December is now the highest it has been since interest levels from 2008, but do you need to be concerned?
Our Financial Services Sales Director at Mortgage Matters Direct, Gavin Welch, says “People currently on fixed-rate mortgages need not be worried. All fixed-term rates are forecasted, so the forecast today won’t affect your current levels.”
Fixed-rate mortgages can give you peace of mind on your monthly finances, however, those on a tracker mortgage may have to be prepared for further rises as the government gears towards stabilising the economy after covid-19.
“Tracker mortgages will react to the Bank of England interest rates, so if you are thinking of re-organising your finances, you should talk to one of our qualified, experienced mortgage advisors who can help you get the best products for your situation.”
Tracker mortgages balance and react directly to the current interest rates, so, if these rates continue to rise, those on tracker rates may feel inclined to look for other options. Luckily, when speaking to an experienced mortgage advisor they can suggest the best ways to part from your tracker rate mortgage and move onto a more fixed-rate if you wish.
Though the 4% interest rate may seem like a big jump, we want to assure you that these levels are simply returning to normal. Pre-2000s the interest rate never dipped below 5%!
We want to say, we get it. We know that now is not the time that you want to be worrying about your outgoings, and we are here for you.
Mortgage Matters Direct have helped people organise and control their mortgages for over 20 years, and we’ve seen the market and interest rates rise and fall, that’s why it is great to get in touch with experts like ours who get it.