Your mortgage might be getting more expensive

7 August 2015

mortgage money There's going to be a bit of chatter about bank rates today. The Bank of England's interest rate has been down at 0.5% since 2009, and it looks like it'll soon go up. As a result, so might your mortgage.

In addition to the interest rate, there's a whole bunch of other factors that will mean your mortgage will increase. Bank funding costs are going to play a role, as ever, as lenders weigh up how much interest they're going to charge on new fixed-rate mortgages and floating-rate mortgages.

Of course, in finance, when a butterfly flaps its wings in the US or Chinese stock markets, a hurricane can hit Britain. The Bank of England's economists recent found that American swap rates were responsible for a number of movements in UK mortgage rates.

And while UK mortgage rates might be at a low level, the Bank of England have said: "Banks' funding costs, an important influence on mortgage rates, had risen since May and it was possible that mortgage rates would shortly begin to rise".

With the US Federal Reserve expected to raise its interest rates before we do in the UK, you can see what is going to happen. Even though the interest rate is going to stay at a similar level for the next 6 months, it doesn't mean other factors won't put up the price of a mortgage.

TOPICS:   Investments   Home   Mortgages

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