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Last chance saloon for borrowers

Rob Clifford, Director at Stonebridge and CEO of SDL Mortgage Services, says it’s time to end unhelpful speculation about the impact of marginal interest rate rises in the future.

It is a decade since the Bank of England dropped its base rate to a historic low of 0.5 per cent – but, with no change to the current 0.75 per cent expected this Thursday, the latest announcement looks set to be another non-event.

Even if the news is lost in the noise around Brexit, then I would urge borrowers to avoid complacency otherwise they could well get stung when rates eventually do rise. There are already many two-year fixed rate deals coming to an end this year, and nobody wants to roll onto their lender’s Standard Variable Rate (SVR), which could typically be around five per cent.

While most borrowers are more likely to base their decision to move on personal circumstances rather than wider economic factors, there is plenty of opportunity to get rate and payment certainty.

Competition in the market is continuing to drive mortgage availability, even among those who would traditionally have struggled to get a mortgage. Banks and building societies have reacted to consumer demand for more certainty with fixed rate deals, while buyers today normally have their pick of many different variable and fixed rate mortgage deals.

On top of the zero deposit mortgages now available from some lenders, Virgin Money has just announced that it will consider applicants with satisfied CCJs and defaults on their credit history – a sign of confidence, even in the current economic climate, which increases consumer choice.


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