Mortgage tips ahead of Bank decision
Homeowners and buyers across the UK may be waiting with bated breath for the Bank of England's Monetary Policy Committee (MPC) to decide on whether to change the base rate of interest.
The committee's choice could have a serious impact on both home buyers and those who wish to take out finance to fund a bespoke conservatory project.
Unbiased.co.uk spoke to John Charcol expert Ray Boulger, who had some advice for those looking to take out a mortgage or change their current one.
He noted that there are two extreme schools of thought on how the market may pan out over the coming years, with the first being that the base rate will stay at 0.5 per cent for the coming months and slowly rise until about 2016.
The second is that the rate could quickly shoot up to eight per cent, adding a massive chunk onto some borrowers' repayments.
If the latter path is taken, Mr Boulger recommends locking into a low-interest deal for at least five years.
An offset mortgage may also be useful as "it effectively allows unlimited overpayments, with the facility to re-borrow those funds at will at the mortgage rate over the whole" term.
If the former prediction pans out, a variable or five-year fixed-rate mortgage should be good options.
The comments follow a separate forecast from Informed Choice, which suggested that the MPC would be unlikely to change the base rate until at least 2011.
Posted by David Waxman
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