Interest Rates- Are they likely to rise "Post Brexit"?
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Interest rates play a major role to those with mortgages. Is it, in fact, one of the most frequently asked questions about mortgages advisors are interest rates going up and is it a good time to buy? How will rising interest rates affect my repayment is also a question which is quite high on client’s minds.
The good news for UK buyers is that for the moment it seems as though interest rates are not moving and are in actual fact at an all-time low especially with the Bank of England base rate being at an all-time low of 0.25%.
Interest rates in the United States of America, on the other hand, are on the up. The Federal Reserve in the United States has signalled that interest rates will be on the rise, the Bank of England, on the other hand, has signalled that in 2017 the United Kingdom will not be doing the same.
Post Brexit
The latest news as of March 2017 is that employment remains healthy and that banks are not expected to raise rates especially due to Brexit uncertainty. Although if the economy continues to grow as it has been there may be a shift in the current mood.
According to Howard Archer, the chief Uk economist at HIS Global ‘The Banks of England has become concerned about the potential inflation overshoot but we still expect interest rates to remain at 0.25% through 2017 and 2018 at least.
Many experts were wrong about brexit’s immediate effect on the mortgage market. Many predicted that rates would rise after the initial referendum result but in reality, they actually fell.
This was a result of the Bank of England cutting its lead bank rate in August as well as the fact that there was increased competition in the mortgage market as lenders were competing for a smaller pool of buyers thus they, in turn, had to lower their rates.
There has however been a gradual rise in rates since the turn of the year and a clear example of this is when HSBC took away its cheapest two-year rate of 0.99% and increased the rate on other deals. This gradual increase looks set to continue through 2017 and this is due to the cost to banks in obtaining capital which has had a trickledown effect on mortgage rates.
What is evident is that the Bank of England will proceed in a cautious manner by either keeping interest rates low or keeping them on the same level. All of which is good news for those who are either looking for a mortgage or who already have one.
Contact us now to discuss your personal options, Revolution Finance Brokers specialise in commercial and residential finance in Essex, Kent, London and Hertfordshire.
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