Worried About Rising Rates?
9 For months, we have been led to believe that a rate rise is imminent, but the Bank of England Monetary Policy committee keep pushing the decision into the long grass.
The EU referendum caused the Bank of England to cut the bank’s interest rate to 0.25% against the backdrop of a feared economic shock and expectations for a hike were significantly set back.
In addition, Donald Trump’s victory across the pond upended the world’s financial markets. All of a sudden US is expected to see a number of economic benefits in terms of growth, inflation, interest rates and investment returns, with the rest of the world enjoying the knock-on effects.
Mortgage holders have been rewarded with a long period of record-low rates but all good things must eventually come to an end and many people are wondering if they will be able to manage the increased financial burden if rates are hiked.
The growing strength of the UK’s economy and continuing confidence pushing up spending in the high street, mean that a rise is on the cards and some economists predict rates could rise by as much as 3% by 2020.
One way to get peace of mind is by having a mortgage advisor review your current product and recommend ways that you might mitigate any impact, such as switching to a fixed rate product while there is still time to fix in. If the market is beginning to turn, some say it may be wise to secure a cheap fixed-rate mortgage while you can.
Unsure whether you want to get a fixed-rate mortgage or bet on an interest-rate cut? Talking through your options with a mortgage advisor will give you some peace of mind.