In the Daily Mail today the former Bank of England governor Sir John Gieve said interest rates could rise this year for first time in seven years..
Interest rates have been held down by the Bank of England since 2009, but he argues that interest rates should rise this year.
If you are thinking of switching your mortgage to a cheaper fixed mortgage, is now the time?
Here’s the article link http://dailym.ai/1kB03xX
Mortgages are now the cheapest in history: Big banks hand out cheapest deals since records began – saving families around £1,000 a year
- Boom comes as ex-deputy Bank of England governor Sir John Gieve said interest rates could rise this year for first time in seven years
- Sir John said the central bank should start to ‘normalise’ rates soon after having held them at an ’emergency’ low of 0.5 per cent since 2009
Britain’s banking giants are handing out the cheapest mortgage deals since records began, saving families around £1,000 a year, official figures revealed yesterday.
The cheap loan boom comes after a former deputy governor of the Bank of England said interest rates could rise ‘before the end of the year’ for the first time in seven years.
Sir John Gieve said the central bank should start to ‘normalise’ rates soon after having held them at an ‘emergency’ low of 0.5 per cent since 2009.
But Sir John, who was deputy governor under Lord King from 2006 to 2009, said: ‘These are emergency rates of monetary policy. We should be expecting them to normalise them over a period.’
Speaking in London yesterday, he said: ‘I think there is a good chance that we will see the first rate rise before the end of the year.’
Official figures from the Bank show the average two-year fixed rate deal for people who put down a 25 per cent deposit has dropped to just 2.37 per cent, the lowest rate in history.
In March 2009 – the month that the Bank cut the base rate to 0.5 per cent – the average rate was 3.98 per cent.
For a family with a £100,000 loan, this means their monthly repayments have dropped from £527 a month to £442 a month, a saving of £85 a month or £1,020 a year.
Other types of mortgage deals have also hit rock-bottom levels, such as lifetime trackers at just 2.92 per cent and three-year fixed rate with a 25 per cent deposit of just 2.89 per cent.
For first-time buyers with only a five per cent deposit, the number of mortgage deals available to them has risen to its highest level since the credit crunch began.
