Interest rates are currently very cheap on remortgages and other mortgage type loans including new purchase mortgages and buy to let deals.  While cheap in historical aspects they may not be as cheap as they need to be to keep the economy moving forward.  That question is often considered and homeowners thinking of getting a remortgage may be asking themselves if interest rates could get any cheaper.

The forecasts by economists are that the Bank of England’s Monetary Policy Committee (MPC) will leave the standard base interest rate at 0.5% throughout the rest of 2012 and perhaps will do the same throughout 2013.  The question considered next is whether lenders will remain offering cheap remortgage deals and might they discount those rates to cheaper levels?

Economic problems in the eurozone and the continued weakness of the UK economy have caused lenders to become more cautious.  It has also caused a higher cost in funding loans to consumers.  The more cautious outlook and increase in funding costs have forced lenders to raise their interest rates.  Unless the factors causing an increase in the interest rates change then lenders are not likely to lower their interest rates or stall from increasing them further.

The government has begun a new programme aimed at helping lenders keep borrowing cheap and available to consumers and small businesses.  By offering government funds at cheaper rates to lenders than what can be found in the global lending market the lenders can offer loans at cheaper rates.  So while the conditions that set rising interest rates from lenders into motion may not change in the near future the government is hoping their help will offer some relief from interest rates rising further.