Confidence In Variable Rate Mortgages On The Increase

Confidence in​ Variable Rate Mortgages on​ the​ Increase
According to​ a​ recent report consumers confidence in​ variable rate mortgage products is​ on​ the​ increase in​ the​ UK,​ following a​ substantial period of​ consumers tending to​ shy away from variable rate products,​ preferring instead to​ opt for more stable,​ yet more expensive,​ fixed rate deals .​
The series of​ five interest rate hikes between August 2018 and July 2018 resulted in​ many homeowners trying to​ remortgage to​ fixed rate deals in​ order to​ try and avoid the​ effects of​ further interest rate rises,​ as​ well as​ resulting in​ first time buyers opting for fixed rates to​ avoid the​ pitfalls of​ rising repayments during the​ first few years of​ mortgage repayments.
However,​ since July of​ this year the​ Bank of​ England has kept interest rates firmly on​ hold at​ 5.75%,​ making it​ latest announcement to​ keep rates stable just last week .​
It is​ thought that part of​ the​ reason for the​ bank's decision to​ keep rates on​ hold is​ the​ possible of​ effects of​ the​ global credit crunch upon the​ UK's economy,​ resulting in​ the​ Bank of​ England taking a​ wait and see stance .​
Another reason for keeping rates on​ hold for the​ moment,​ state experts,​ is​ that CPI inflation is​ now within the​ government's target of​ 2%,​ coming in​ at​ 1.8%,​ which is​ its lowest in​ a​ year.
Predictions from analysts and economists that the​ Bank of​ England will not raise interest rates again for the​ remainder of​ the​ year has seen renewed interest in​ variable rate mortgages from consumers in​ the​ UK,​ with many breathing a​ sigh of​ relief over the​ fact that repayments are unlikely to​ be affected by further interest rate rises this year .​
This renewed interest has been further fuelled by additional speculation that interest rates may even fall by the​ end of​ this year,​ with many economists expecting – or​ urging – the​ Bank of​ England to​ cut interest rates .​
Many are now expecting rates to​ fall by at​ least a​ quarter point by the​ end of​ the​ year.
Interest in​ fixed rate mortgages peaked recently,​ as​ homeowners and first time buyers struggled to​ find a​ solution to​ the​ problem of​ rising repayments resulting from the​ hike in​ interest rates .​
However,​ some experts have even predicted that interest rates could fall back to​ around 5% by the​ end of​ next year,​ so many consumers may want to​ avoid tying themselves into more expensive fixed rate deals under fears that they may end up paying way over the​ odds in​ six or​ twelve months' time.
Confidence In Variable Rate Mortgages On The Increase Confidence In Variable Rate Mortgages On The Increase Reviewed by Henda Yesti on June 30, 2018 Rating: 5

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