29.07.10 by Andrew Montlake
Low Rates For 4 Years?
The latest report from a leading economic think-tank says Bank Base will stay at 0.5% until 2014, whilst the Governments own Office for Budgetary Responsibility suggests rates may rise next year. Meanwhile, one member of the Monetary Policy Committee says rates need to rise now!
Welcome to the wonderful world of economic forecasting.
With all these contradictory forecasts around it is no wonder that the public do not really know what to think, which is one reason why the whole question of advice needs to be turned on its head. Trying to call the future, as many do, can often work out to be more than a little painful and what is good now for one person, may not be in a year or so.
So what are the choices at present?
If you do subscribe to the view that rates will be low for a while yet and, more importantly, can afford to meet an unexpected rise of at least 1%, then there are some eye-catching low rates. Two year tracker rates are now starting from just 2.19%, (4.00% APR), whilst there is an excellent lifetime tracker starting at just 2.35%, (2.40% APR), with no repayment penalties.
On the other hand, for those who are a little more cautious and need the security of a fixed rate, for just a little more you can obtain a 2 year fixed at 2.89%, (3.50% APR).
There are also some highly competitive longer term fixes with 3 years starting at 3.64%, (5.60% APR), and 5 years from just 3.99%, (4.70% APR).
For us, even though the budget has sounded the starting gun on some pretty hefty cuts, which will in turn feed through to unemployment figures and a potential slowdown in the pace of recovery, we are sticking to our guns that rates will have to rise sooner rather than later.
Whilst tracker products are undoubtedly cheaper at present, whether they are better “value” can only be judged with the benefit of hindsight.
Monty’s Mortgage Blog
19.08.10
Mortgage Lending Up...A Bit
Today saw the release of the latest set of data from the Council Of Mortgage Lenders, (CML) stating that Gross Mortgage Lending rose by 5% in July compared to June, although this is still 3% down from July 2009.
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