Mortgage Interest rates – what’s going to happen?
The general view of economists and markets is that the first rise will come late in the second half of 2011 but the forecast has been shifting and a token rate rise well before that is a possibility. That view was reinforced by MPC (Monitory policy committee) ‘hawk’ Andrew Sentance saying a rate rise was needed ‘to show we’re on the case’ (25 Nov).
View the full article http://www.thisismoney.co.uk/interest-rates
My Comment
There is a lot of uncertainty about when and by how much interest rates will rise. An interesting indicator is Mortgage Lender interest rates. Tracker rates have still been coming down, with lenders competing for market leading rates..
More significantly, a major lender has just announced cheaper fixed rates. 2 year fixed rates are now only marginally more expensive than trackers, which must reflect lenders expectations that rates will remain low for some time.
3 year fixed rates are more expensive – so there is clearly more uncertainty after the next 2 years.
