Low Interest Rates Are Forecast, What Does This Mean For Mortgages?
Since the recession began and since it ended, there has been a lot of talk around
interest rates and whether these will go up or down over the next 12 months and the effects on the economy in either situation. It seems to be widely agreed that the low interest rates we are currently experiencing in the UK will continue for at least the next 12 months and probably for the next three, certainly according to the Bank of England and well respected professional services firms across the world.
Low interest rates can be a good thing for those people who are struggling with mortgage repayments and help them to avoid the worst case scenario of falling behind with their monthly repayments. Not only are low interest rates potentially good news for those with existing mortgages but they can also be positive for those people looking to buy property with the help of a mortgage. This is due in part to the fact that low interest rates should serve to underpin the housing market and help to prevent a housing crash like the one the UK recently experienced.
As long as interest rates remain low there is a good chance that the mortgage market will remain stable and affordable for first time buyers and those looking to get a mortgage for the first time. Remortgaging should become less attractive as existing mortgages remain steady and affordable and this in turn should also mean less homeowners get into arrears with their mortgage payments.
While rates remaining low is good news for the mortgage market and good news for potential buyers, experts are saying that a return to loosely given credit and extensive borrowing is not on the cards. As a result of this the country should be less likely to fall into the trap of borrowing more than it can afford to pay back and is therefore less likely to experience a housing crash and while this might mean a lower turnover of property for now, it should mean a stable market going forward.
So if you are looking to buy a house in the near future and to do so you need a mortgage, the best place to start is with a whole of market mortgage broker, one which will be able to give you an overview of the mortgage deals available and which one is the best one for you, taking the rate of interest into account.