The decision to keep interest rates at 0.5% has looked increasingly likely in recent weeks, despite the earlier strong signals from the Bank of England that May would see a rate rise.
Over the past two weeks, the market has adjusted to this outlook. 3 month LIBOR now stands at 0.673%, down from a recent peak of 0.758% two weeks ago when markets wrongly thought a May rate rise was inevitable.
We’ve also seen year swap rates (or 12 month Libor) increase slightly and 2 and 5 year SWAP rates decrease, signalling that the market expects rates to remain low and we may not even see a modest rate rise this year.
Despite all the earlier warnings from the BoE that rates would rise, lenders are offering great deals and increases announced so far have been modest – ranging from 0.01% to 0.1%. Decisions about your mortgage should always be taken with a long-term view and our advice to those looking for a new mortgage or renewing their existing lending remains the same. If you’re concerned about rises in interest rates affecting your repayments, then now is an excellent time to fix.
Notes for Editors
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