The Bank of England has kept its base rate at 0.5 per cent in January, which will be good news for homeowners as they continue to pay off their mortgages.
A statement from the UK`s central lender indicated that the state of the economy was such that it didn`t feel the need to alter its policy, which has been at the historically low level since March 2009 when the Bank was trying to stimulate the markets.
In truth, there had been little expectation of the rate increasing this month as the Bank of England`s governor Mark Carney has previously suggested that he won`t entertain the idea until the unemployment rate gets below seven per cent, which is expected to be late this year or early 2015.
Even then, Mr Carney has made it clear that it won`t automatically mean that the interest rate will go up, which is good news for people with mortgages tied to the base rate and those who are looking to get a mortgage.
Maintaining the low base rate means that there`s no reason for variable rate deals to go up that are linked to the BoE rate, while people hoping to take out new tracker deals won`t , for now, suddenly be faced with costlier interest payments than before the announcement.
Low interest rates also mean that it could be worth looking at mortgages that allow you to overpay the capital back. Many mortgage lenders let you pay off up to 10% of the capital per year, so maybe you can knock your balance down whilst the going is good.
Find out all you need to know about what the base rate staying at 0.5 per cent means to you and your mortgage scenario by visiting firstchoicefinance.co.uk or by giving us a ring on 0333 003 1505 or 0800 298 3000.
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