August Could Be When an Interest Rate Increase Forecast Finally Comes True
When it comes to borrowing, a property purchase will be the largest a family will likely ever make. It then in turn becomes the largest asset of the family. With such a large debt, most household budgets would need to assure that interest rate on that debt was the lowest that could be obtained. With the Bank of England’s Monetary Policy Committee (MPC) once again leaving the standard base rate unchanged in their monthly meeting, homeowners can remortgage for some of the lowest rates seen in decades. However, the many that could benefit from a remortgage have not done so according to experts.
The 0.5 per cent interest rate has remained for over 2 years, and homeowners that have ended their mortgage deal are doing fine on their lender’s variable rate. Few are even aware of how a rise in their lender’s rate will impact their monthly payments. Even fewer are aware that lender’s variable rates can rise despite the MPC leaving the rate unchanged. A lender’s variable rate is one of the most risky mortgages to have and should only be had by those households that can handle an increase to their interest rate at any time, at any level.
Currently the MPC is forecasted to likely increase the interest rate in August, yet many homeowners have grown used to forecasts failing to materialize. This time however, it could actually happen as inflation is expected to rise in the coming months and possibly to 5.0 per cent. That leaves only a few weeks to grab a great remortgage deal before the current deals disappear.