Low Interest Rates Create Remortgage Predicament
The Bank of England’s Monetary Policy Committee (MPC) voted to maintain its interest rate at 0.5 per cent for July. This low rate has been available for almost a year and a half now, which is historical.
Many experts will be taking a close look at the minutes of the MPC meeting, which will be published July 21. This will be done in an attempt to estimate the future interest rate hikes. One interesting side note is that one MPC member voted last month to raise rates then. Inflation is always the focus considering raising interest rates. Taking this into account, the Bank of England expects it to move back towards the target rate of 2 per cent as the year progresses, even though it currently sits at 3.4 per cent. Ongoing low interest rates have created a dilemma when considering a remortgage. Should a Tracker be chosen over a fixed rate? Although tracker rates still offer better value for the time being, it is also believed by some that a 5 to 10 year fixed rate can also offer a stable, secure remortgage deal. With both types of loans being equally appealing, now is a fine time to think about remortgaging.