Yes as it has been feared for a couple of years now, we are expecting mortgage rates to start going though the roof. Increased mortgage rates may not be a surprise to those who understood what the last government done in this country. For those who don’t I will explain how mortgage rates will rise.
When we first had the recession Gordon Brown helped everyone who had the right mortgage by reducing the bank of england base rate therefore reducing mortgage rates. The current bank of england base rate is 0.5%, this is as low as it will ever be and we will only see mortgage rates go higher from now on.
The bank of england base rate will be set to go up very soon, even if it goes upto 2% everyones mortgage rates and repayments will start to increase for people with base rate tracker mortgages. This increase in mortgage rates however, may just force the country into a double dip recession as families really start to struggle with their mortgage payments.
If you are currently on a tracker mortgages then this should come as a warning to yourself, mortgage rates will go up and when they do it is the poorest that it will hurt the most. Don’t plan poorly for the rest of the year, expect your mortgage rate to go up, if you can you should probably change mortgage to a fixed rate plan incase your mortgage rate takes a massive increase.