Personal Loans

Secured Loans

Other Loan Types

Residential Mortgages

Buy to Let Mortgages

Other Mortgage Types

Mortgage Payment Protection

Life Insurance

Other Finance

Future Interest Rates

With the recent cut in interest rates made at the beginning of August, the first time the Monetary Policy Committee has cut rates for a year, many people are now wondering what the future will hold for the base rate.

There is growing speculation amount financial analysts that further rate cuts are on their way, and that the August quarter percent drop was the first step in a larger plan of the Bank to bring rates down in order to balance the consumer slowdown. One of the primary concerns to the Bank will be the possibility of kick-starting another housing market boom by reducing interest rates too fast, however while it may seem simple that lower mortgage costs will mean more people wanting to buy, this may not be the case.

House prices have risen well above inflation over recent times, putting the cost of the average house at a price where many people are not just limited by the mortgage repayments, but also by the deposit required. A fall in rates will ease the financial burden of mortgage payers for sure, but it will do nothing for those who cannot raise the ten percent deposit generally required, and so a boom is not likely off the back of base rate cuts.

A continuation of the rate cuts will be a welcome thing to borrowers, both those with personal loans, and also perhaps more so to those with mortgage payments to meet each month. Interest rates tend to go in cycles of rises and reductions, the peak for this cycle has seemingly passed, so how long will the reductions continue and what will be the lowest point before they pick up again? Of course no one knows the answers to these questions for sure, but there are a few experts predicting rates to hit a low of three and a half percent by the middle of next year.