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Interest Rate Prediction - Remortgage Now?
Mortgage rates are so important to the decision that everyone has to make about their mortgages. Are they going to hold the base rate or are they going up? It is very difficult to see a drop in current interest rates for the forseeable future. Whatever the interest rate is today will always fluctuate up and down espcially in the current economic climate.
So what affects mortgage rates?
First and foremost is inflation. Whatever that inflation factor is will make that mortgage rate fluctuate. A general rule of thumb here is if inflation is on the up then so will mortgage rates. At the time of writing inflation is on the decrease but this decrease is slower than the rate of base interest is dropping. Why is this? In an effort to keep inflation in the green the Bank of England has reduced interest rates faster to halt the slide.
So what affects inflation?
Directly affecting the inflation factor is the supply and demand of the economy. It is a very complicated subject just keeping an eye on the inflation factor will help you forecast the general direction of mortgage rates. If you want to keep your eye on the economy you should measure the Pound against other currencies. Also a tinker in the stock market will show if the economy is picking up. Its important to remember that economy, inflation and interest rates are 3 different subjects but are very closely linked.
In times gone by any change in the mortgage rate will be 1-2 % and probably will bottom out at 4% and never more than 10% even in the most volatile times of history. However we are now at 0.5% the lowest in its history and we have been frozen at this for the last 2 possible changes. More often than not rates will move but they will only move at half or even a quarter of a pecentage point. It is highly likely that the next review of interest rates will see the first rise in years.
So what does all mean to you?
Bank of England base rate will probably never be less than what it is now but that doesnt mean that mortgage rates are at their lowest yet. you should talk to your lender about refinancing now as it will not be long until the optimal time comes. You should research the market and follow the best buy tables daily. It could help you pay off some bills, improve your home, or just having extra money. We are approaching the tipping point ladies and gentlemen so lets make the most of it before we are back up to the 5% region.
So what affects mortgage rates?
First and foremost is inflation. Whatever that inflation factor is will make that mortgage rate fluctuate. A general rule of thumb here is if inflation is on the up then so will mortgage rates. At the time of writing inflation is on the decrease but this decrease is slower than the rate of base interest is dropping. Why is this? In an effort to keep inflation in the green the Bank of England has reduced interest rates faster to halt the slide.
So what affects inflation?
Directly affecting the inflation factor is the supply and demand of the economy. It is a very complicated subject just keeping an eye on the inflation factor will help you forecast the general direction of mortgage rates. If you want to keep your eye on the economy you should measure the Pound against other currencies. Also a tinker in the stock market will show if the economy is picking up. Its important to remember that economy, inflation and interest rates are 3 different subjects but are very closely linked.
In times gone by any change in the mortgage rate will be 1-2 % and probably will bottom out at 4% and never more than 10% even in the most volatile times of history. However we are now at 0.5% the lowest in its history and we have been frozen at this for the last 2 possible changes. More often than not rates will move but they will only move at half or even a quarter of a pecentage point. It is highly likely that the next review of interest rates will see the first rise in years.
So what does all mean to you?
Bank of England base rate will probably never be less than what it is now but that doesnt mean that mortgage rates are at their lowest yet. you should talk to your lender about refinancing now as it will not be long until the optimal time comes. You should research the market and follow the best buy tables daily. It could help you pay off some bills, improve your home, or just having extra money. We are approaching the tipping point ladies and gentlemen so lets make the most of it before we are back up to the 5% region.
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