Quote:
Originally Posted by rogerxp
...in answer to your question...
It's still difficult to say as thoughts have changed from yesterday to today; literally.
There are two camps. One who thinks the interest rate will stay very low for another 12-18 months and then climb quite quickly up to 5%ish over the following 12-18 months. The other camp sees a slower increase but ultimatley ending up at 5%ish over the next 3-5 years. This might sound bleedin' obvious, and sitting on the fence, but you did ask  .
External factors such at VAT changes in January, low inflation (and it's own prediction), and the effect of the Goverments guillotine taking affect are all making interest rate predictions difficult. Other factors like 'loan to value' and level of security people want to see in their payments also affect what deals are available and their suitability.
I think the most popular prediction is 0.25%, perhaps 0.5%, over the next 12 months. Ernst & Young say it'll stay at 0.5% until Easter next year  .
It'll go up, but predicting when and at what rate is the difficult bit, that's why I'm speaking to my mortgage man constantly about it. More information will be out in a couple of weeks time when, yet another, finance report is released.
I'll be jumping to a fixed rate, from my current SVR, just when my nerves can take no more. You can actually apply for one 3 months in advance, get it agreed, then keep delaying the start date. If you don't need it just cancel it. I'll be doing this to try to secure the best fixed rate before it's withdrawn - a bit of a pain but fairly cunning  . Not really a service I can offer to everyone as pretty time consuming.
Watch this space... |
I am watching carefully too, my mortgage is a lifetime tracket at BoE + 1.03%, but there is a 'floor' at 2%, so am currently paying 3.03%. Therefore, I have a 1.5% cushion before my mortgage is affected. I am hoping that gives me about 18 months or so. I do have the option of a 'switch and fix' for free with the same provider, but the rates are not particluarly favourable, certainly at the moment.
A two year pay freeze doesn't help matters either if rates begin to rise, but hey ho, at least I have a job.
Lets hope investment returns start to improve markedly to compensate!
Sorry to the OP, seem to have been threadjacked!