May Newsletter

What’s happening with interest rates?  Hang on a second, I’ll just check the Oracle….nope sorry he must be having an off day, nothing sensible coming out him.
On one of our training days here at Clarity we were lucky enough to be graced with the presence of one of the leading high street banks Head Economist.  As you would expect one of the subjects he covered was interest rates.  He was asked what is going to happen to interest rates?  Oddly enough his Oracle was having an off day as well.   Oracles…………they just don’t make ‘em like they used to.
If a Head Economist of a major bank can’t tell us what will happen to interest rates, what chance do you or I have?
Sure, you will hear any number of High Brow Sages’ ruminating that, for example,:
‘Interest rates have gone up every year for the past 3 years every December so we MAY expect another rise this year.’
Or
‘Inflation is rising so interest rates will have to rise to keep up, so expect a POSSIBLE rise next month!’
Etc, etc.
And then something comes out of left field and everyone is back to square one again!

So in May, the Bank of England held rates at 0.5% when economists predicted  a rise was a dead cert with a 90% chance.  But all is not lost……..,a rate rise is still POSSIBLE in August they say……..or later!
CURRENT projections (watch out for that left-field) EXPECT gentle rises over the next 3 years.  Now of course the Bank rate influences the cost of mortgages and we have seen a number of lenders starting to increase their rates.

How does this affect The Man On The Clapham Omnibus? (I used to sit opposite him every morning when I travelled to school……….. honest!)
Taking on debt of any sort at any time is a major commitment, so of course it is wise to seek professional advice when considering the best way forward.  Any future increase in the cost of mortgages would be a concern and especially so for the 4 millions who are still sitting on their Standard Variable Rate with their lender.  They obviously didn’t read my March newsletter! http://claritymortgagesolutions.co.uk/news/march-newsletter/

With all the uncertainty surrounding interest rates, it is not surprising that many homeowners opt for fixed rate deals, although of course there are cases when other types of deals are more suitable.
A fixed rate deal can help protect you from interest rate rises and budget effectively month to month.
Whatever you are looking at doing mortgage wise, get in touch and we can advise on the arrangement to meet with your individual circumstances.

Until next month,

All the best,

Alan

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