Archive for the 'Interest Rates' Category

The Bank of England has held interest rates at 0.5% for the 18th month in a row. The hold on rates was widely expected, but there is an expectation that it won’t be long before the rate is increased in order to keep inflation in check. Frustratingly for potential house buyers, the low base rate is combined with a high level of difficulty in arranging mortgages – although it would appear this is easing in recent months.

The Bank of England has just announced that its interest rate will stay at 0.5% – bringing us to a full 12months of the lowest interest rate of all time.

Since the UK economy is still in a fragile state, the move was widely expected. Any increase in the rate could have been a hammer blow to the UK’s recovery.

Although the Bank of England rate is still at 0.5%, mortgage rates are still significantly higher than this – the average standard variable rate is at 4.7%. and the average two-year fixed-rate mortgage is now at 3.9%.

Recent data from Halifax suggests that house prices dropped by 1.5% in February – likely to be due to the drop in demand following the recent return of the lowest stamp duty band to £125,000 from the £175,000 figure it had temporarily been increased to.

Hannah-Mercedes Skenfield, mortgage expert at moneysupermarket.com said: “Undoubtedly the biggest winners from the fall in interest rates have been those consumers who have been sat on standard variable rates (SVRs). Traditionally lenders’ SVRs have usually been higher than the deal that was ending so consumers would have to remortgage as a result. Now we have a situation where many consumers are sitting on extremely low rates and have no incentive to move. We have started to see SVRs starting to increase again, and rates for remortgaging starting to fall so for some consumers, now is the time to consider looking for an alternative deal.

“The losers have been those consumers who have little equity in their property or those who have been looking to get a foot on the housing ladder, particularly first time buyers. There have been some positive signs in the mortgage market over the last 12 months; we saw the number of available mortgage products fall below the 2000 mark in 2009 but we have seen a steady increase since with numbers in excess of 2,700 which shows that the recovery in the market is in place, although it is a way short the height of 2007 when there was over 30,000 products. In addition, those who are even able to access a deal with an LTV of 90 per cent will have found themselves paying a hefty premium for the privilege, often as much as 6.05 per cent.”

The Bank of England has decided to keep the base rate at 0.5% for the 10th month in a row. The rate is still at its record low, and commentators do not expect the rate to increase any time soon. Mortgage deals are of course rather higher than this base rate, with fixed rate deals at about 4% and even then, only for those with 30 or 40% deposits. Base rate trackers are better with rates dropping to around 2.5%.

The Bank of England has just announced that it is keeping the base rate at 0.5% for the sixth month in a row. It is widely expected that the rate may stay this low for at least the rest of the year. Despite this, mortgage deals are still only available at around 4% on fixed rate options, and you need a 25% deposit to secure the best deals.

The Bank of England has just announced that the base rate will stay at its historic low of 0.5% this month. Whilst this is generally good for people on variable rates, new fixed rates deals are still hovering above 4% even with hefty deposits. Since the base rate can only really go up from here, and is likely to before long, it is unlikely that fixed rates will get any lower.