For the 37th month in a row, interest rates have been held at 0.5 per cent. This comes as no surprise; indeed, it is unlikely that there will be any move in interest rates for the next couple of years at least.
Yet while interest rates haven’t moved, mortgage rates are on the rise. The higher cost of funding on the wholesale markets and general reluctance of many lenders to stick their heads above the parapet when others are tightening their interest-only criteria or raising their standard variable rates (SVRs), means there is a general trend towards less favourable terms.
But all is not lost. Advice is more crucial than ever. Interest only is still possible, particularly if you meet the private banks’ criteria. Remortgaging may be worth considering if you are on your lender’s SVR. The important thing is to take a look at your circumstances rather than ignore the problem and hope it goes away.