Tuesday, 22 August 2017

Interest rates could rise this year

The cost of fixed—rate mortgages has begun to edge higher following news that interest rates could

The cost of fixed—rate mortgages has begun to edge higher following news that interest rates could start to rise this year, fresh research has shown.



The average rate charged on a two—year fixed rate deal has now crept up to 2.76 per cent — up from 2.73 per cent just last week, according to financial information group Moneyfacts.co.uk.

Two lenders, L&G Mortgage Club and Pink Home Loans, have also withdrawn a number of their fixed—rate deals.

The move comes after Bank of England governor Mark Carney warned in a recent speech that the official cost of borrowing could be increased within months.



He said that with the economy recovering, wages rising and high numbers of people in employment, interest rates would have to rise to help control inflation.

He added that the first increase to the bank rate could come at the turn of the year, while he suggested that over the medium term it was likely to rise to around 2.25 per cent.

His comments are expected to lead to a rush among homeowners to take advantage of the current low mortgage rates on offer before the cost of borrowing starts to rise.



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