Interest Rates: When Are They Likely To Rise?
Interest rates are of huge importance to those with mortgages. In fact, one of the questions many house buyers will ask a mortgage broker is whether or not they think interest rates are likely to go up in the near future. If so, they can expect their repayments to be affected. The good news is, for the moment at least, that despite interest rates going up in the USA, the UK’s rates don’t look like they’re rising anytime soon.
Interest rates on the up in America
Less than a day after the Federal Reserve in the US signalled the interest rates were going to rise this year, the Bank of England made a very clear announcement that interest rates in the UK would not be doing the same in 2017. The Federal Reserve, however, is taking a different approach: Donald Trump is planning not only on cuts to taxes but more spending on infrastructure. So, with less money coming in and more money going out, the Federal Reserve has taken action by suggesting interest rates could rise over the next twelve months. In fact, some are even predicting that they could rise three times.
The Bank of England has welcomed the news that growth has held up fairly well in the aftermath of the EU referendum. This alone would suggest that it might be worth following the lead of the Federal Bank by raising the rates. The good news, however, is unlikely to last and the Bank of England knows it. With consumers unlikely to continue spending if rising interest rates hit their living standards, the Bank of England will proceed with a cautious method by either keeping interest rates the way they are or even lowering them. All of which is good news for those with a mortgage as well as those looking to get one.
If you think you could benefit from advice from an independent mortgage broker, please don’t hesitate to get in touch. We offer mortgage brokering services in London, Bristol and Bath.