Interest rates will increase and that is the truth that homeowners and home buyers should embrace.  Nothing is likely to deter an interest rate change as the economy is continuing to show steady growth.  Rather than miss out on getting a cheap interest rate those looking to borrow should step up to the line and begin the process as it takes longer than in the past.  The Mortgage Market Review has made the process of obtaining a mortgage or remortgage loan a bit more involved due to borrowers having to share more information on their saving and spending habits.

The Bank of England’s Monetary Policy Committee (MPC) met at the beginning of the month and it was thought that perhaps either in August or September the result would be that at least one member would vote to increase the interest rate.  It currently sits at a historical low of 0.5% and has not adjusted from that level since March 2009.  The recently released minutes from the August meeting revealed that actually two members voted to increase the rate by 0.25% to 0.75%.  The member voting to increase the rate were Ian McCafferty and Martin Weale.  Therefore the vote was 7-2 to hold the current rate.  This is the first time the committee has split on their decision since July 2011.

Tuesday data was released that showed inflation fell under the 2.0% goal of the Bank to 1.6% which should strengthen the forecasts of economists that the rate will be changing sooner than later.  The expectation is that the MPC could vote to increase the rate by either the end of the year or in early 2015.

Those considering a remortgage or mortgage deal should pay attention to the rates offered by lenders.  Lenders will not be waiting on the MPC to vote before they begin to increase their rates and their standard variable rates.  They will do so when it best suits their individual lending needs.  Therefore, waiting on a warning concerning the Bank’s decision could result in a borrower finding that lenders have already begun to pull their cheapest deals.