Interest Rates: Now Highest For 6 Years
July 8th, 2007
You’re probably aware that interest rates have risen once again, up 0.25% to 5.75%. This is the highest rates have been since March 2001.
The graph below shows how rates have changed over the past 10 years:
I think one of the key things to look at is the difference between the rates as they were 2 or more years ago, and today’s rate - for those that took out fixed rate deals back then, if they’re coming out of their deal they will be hit pretty hard by the rise in rates. For example, if you took a 2-year fixed rate deal out back in Oct / Nov 2005, the interest rates would have been around 4% - you’ll now be looking nearer the 6% mark. The good news for these people is that they’ve got a few monts to start looking for a new mortgage deal - get in touch with an independent mortgage broker and start discussing your options. Similarly, for any people who took out a 5-year fixed rate deal back in July 2003, it will be interesting to see what rates will be when their deals end next year - it’s likely to be around 6%, but their original rate is likely to have been around 3.5%.
If you’re in that sort of situation, use our mortgage repayment calculator to try out a few examples and work out what mortgage rate you could afford.
More information on the interest rate rise can be found from the following sources:
- BBC: UK Interest Rates Rise To 5.75%
- Reuters: Interest Rates Up Again
- Motley Fool: Base Rate Rises To 5.75%
Historic interest rates were sourced from here.
Categories: Debt, Featured, Interest Rates, Mortgages
