Interest rates up or down

isouthgate

I have been told by my work mates that after a general election interest rates generally go up for several months on the bounce. Is this true as I am currently on a variable rate mortgage and was wondering if I should change to a fixed rate. Any advice would be great. cheers Ian.

dougk_2

It is unpredicatble - Most economists have said for a long time we are near the peak of the rises. It may move .5% either way but I think month on month rises are very very unlikely.

Personally speaking I would move to a fixed rate anyway as the rates offered by say Nationwide are lower on Fixed than their SVR!

meanmachine_2

isouthgate wrote:

I have been told by my work mates that after a general election interest rates generally go up for several months on the bounce. Is this true as I am currently on a variable rate mortgage and was wondering if I should change to a fixed rate. Any advice would be great. cheers Ian.

They might have gone up and up after previous elections, but that's because rates were in the hands of politicians (never a good idea!)

Now that the bank of england is in charge, they are motivated not by politics, but the need to keep inflation below 2%.

Most "experts" are predicting a rise of around 0.5% by the end of the year, but who knows? In 12 months' time they could be back down to 4% leaving you worse off if you've decided to fix.

rchddap1

Many things can change that will affect interest rates, particularly as it is out of the hands of the politicians. At the end of the day you have to do what is right for you. If you feel more comfortable on a fixed rate, knowing exactly what you will pay whether interest rates are 1% or 10% (exaggerated I know) then go for it. But you may feel more confortable on a variable rate being able to take advantage of any future reductions in interest rates.

Its a personal choice. At the moment I have a fixed rate that has about another year to run. I'm not sure what I will do then, but I'll look at the economy, interest rates etc...but most importantly what I need at that point in time...be that stability, or otherwise.

Good luck with whatever you decide.

Al_Mac

The funny thing they are to announce change, if any, on 5th of May. Might be worth saving you vote until the evening.

:beer:

Scott

It looks increasingly likely that interest rates will rise, as inflation has gone up this month to 1.6%, a .2% increase on last month according to the figures released at my work.

Looks likely that we'll be seeing more than 2 of the board voting for a rise come next month's meeting.

However, it depends upon which rate you are currently on. If you wouldn't mind disclosing that, I could advise you better, as I'm pretty familiar with the mortgage market, working in it and all.

I foresee a few rate rises within the year, however as the mortgage market begins to cool down, they'll have to pull back on interest rates to fuel consumer spending, which is the main force driving our economy at the moment.

Meaning: base rate tracker mortgage products will be the mid-term best bet in my view. Fixed rate for the short term, if you get one that's only tied in for two years, which isn't hard. You can get around 5% currently, if you shop around.

Xbigman

Al_Mac wrote:

The funny thing they are to announce change, if any, on 5th of May. Might be worth saving you vote until the evening.

:beer:

The announcement has been put back a week because of the election.

The MPC seems very cautious right now so I personally think we'll see rates rise in May then 2 or 3 months of stability whilst the MPC watches the economic data roll in.
Regards



X

isouthgate

Thanks for the advice my current mortgage is with the halifax and it is a tracker, base rate +.39%. I can get a fixed rate for 2 years with the woolwich at 4.99% with fess of £295. I'm thinking I might be better off changing.

dunstonh

The economists appear split. Some saying we might get one more increase before a trend downwards. Others saying that the BoE will hold tight for a while before seeing a trend downwards.

EdInvestor

I'd be inclined to think that there'll be no change for a while, as the inflation trend isn't clear, and particularly because the High St is looking a bit gloomy and that is closely tied to the property market, where they will want to avoid a crash.But they will also want to avoid reigniting a boom, which might happen if they cut rates.

At the same time the Americans are way behind us in terms of putting up rates, and and must keep putting theirs up step by step, which is one thing having a bad effect on Wall St, which is filtering through to our stockmarket.:(We wouldn't want to make that process worse by putting our rates up further.

Looks to me like doing nothing will be best for the immediate future.

lisyloo

The funny thing they are to announce change, if any, on 5th of May. Might be worth saving you vote until the evening.

The BOE meeting was postponed to 9th May some time ago.