Interest rates were the topic of a a survey conducted by Which? Mortgage Advisers that revealed 32pc of mortgage holders in the UK are unaware of the rate of interest they pay on their mortgage.
Of the homeowners surveyed, the ones who knew the interest rate they were paying were also comfortable that they knew enough about how an interest rate rise would impact them.
David Blake from Which? Mortgage Advisers said;
“With interest rates so low, we have seen a significant increase in the number of fixed-rate mortgages available and a surge in households looking to take advantage of these deals ahead of any potential rise.”
While some homeowners may fear a hike in interest rates, economists predict that the Bank of England are unlikely to raise interest rates in the short term giving consumers longer to find the best deals on their mortgages.
Interest Rates are so low, now is the time to find a good deal
Mr. Blake expressed the importance of people taking hold of their finances and evaluating them now while interest rates are low he said;
“It’s important to remember that fixed rate deals typically have higher rates than trackers, for the time being, at least, but fixing now could potentially save you money in the long term.”
“Now is the time to seek independent mortgage advice if you are concerned about the impact a rate rise might have on your finances.”
The Bank’s monetary policy committee voted eight to one last month to keep the rate which it deals with the banking system at a record low of 0.5 per cent, where it has been since March 2009.
Some market analysts say that by deferring any increase in interest rates to 2017 while good news for homeowners, it could trigger the credit boom something similar to that was last seen back in the early 2000s.
Adrian Owen, head of residential at BNP Paribas Real Estate said;
“There is already a concern at the Bank of England over the pace of house price growth, and while the current lack of housing supply is a significant driver, the sustained low cost of finance is also a major contributor.”
It seems that to bring the cost of housing down to sustainable level interest rates will need to increase as will the number of new homes built to cope with demand.
