8 July 2010

Check out your mortgage options following BOE interest rate decision

Check out your mortgage options following BOE interest rate decision

Looking to remortgage? Find out whether a fixed rate or a tracker is best following the bank of Englands decision to maintain interest rates at .5% for July.

The Bank of England's Monetary Policy Committee (MPC) has voted to maintain the official Bank Rate paid on commercial bank reserves at .5%, making it the longest period since the early 195s for interest rates to stay the same.

The last time Bank Rate was unchanged for so long was when the Queen came to the throne way back in 195253. Back then, Bank Rate stood at 4% from 11th March 1952 until it fell to 3.5% on 17th September 1953.

Interest rate announcements are followed carefully by most homeowners, particularly those on SVR or tracker mortgages and with continued confusion in the world economy and fears of a double-dip recession occurring, many homeowners are unsure what they should do when remortgaging.

There are currently some good mortgage rates available on fixed rates as lenders try to capitalise on consumer uncertainty. Santander has just reduced their five year fixed rate to 5.25 per cent, while Nationwide has reduced a five-year fixed rate by .19%, and is available at 4.49%.

The gap between the rates payable on a 5 or 1 year fixed rate and the initial rate on a tracker mortgage has narrowed since the election, says Ray Boulger from Mortgage Brokers John Charcol.

In general, lifetime trackers still offer better value for the time being, based on our expectation that interest rates will only rise slowly, but at current pricing the best 5 to 1 year fixed rates are now a viable proposition for those who want, or need, interest rate security.

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YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE