5 Aug

Lenders pondering interest rate rise

Lenders pondering interest rate rise

Recent talk of a possible increase in the base rate of interest means the cost of borrowing could be set to rise, with some mortgage providers already increasing their rates.

MoneySuperMarket claims a number of lenders have been influenced by rumours the Bank of England could support a rate rise at the start of next year.
This means some of the top home loan providers have already revised their products to take account of a possible increase.

For example, at the start of July First Direct offered 1.49 per cent in its top two-year fixed loan, but this has since increased to 1.69 per cent.

The mortgage borrowing sector also appears to have some quirks, with homebuyers looking for a 65 per cent loan to value mortgage getting better deals than those securing a 60 per cent loan to value.

"It is prime time for those looking for a mortgage as there are still some great deals on the market even if it's a bit bizarre that you can currently get a cheaper deal with a smaller deposit," said Dan Plant, consumer expert at MoneySuperMarket.

He added that with the ongoing rate rise speculation it may be financially beneficial for those looking for a mortgage to look sooner rather than later.

The base rate has remained at 0.5 per cent since March 2009, but recent comments by the Bank of England's governor Mark Carney have suggested this could change in the coming months.ADNFCR-1222-ID-801796601-ADNFCR

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