Interest Rates Stick At 5.5%
January 10th, 2008
Borrowers on tracker deals are going to be disappointed, but I welcome today’s news that the Bank of England has not given in to untimely pressure to cut interest rates.
A 0.25% cut from 5.5% to 5.25% would have reduced a £100,000 tracker repayment mortgage from £614.09 to £599.25 a month, a saving of £14.84. Yes, it may have been a psychological boost to those borrowers feeling the pressure from their monthly payments, but it would not have made sweeping differences to repayments on the average loan. This would have been the wrong time to lull the financially-strained into a false sense of security. Christmas overspending must be paid back as a priority, and January sales should not be indulged unless you can afford to do so. Those who are struggling now need to get their finances in order more than ever.
Economists are still predicting that an interest rate cut is imminent, and I would welcome this next month. Right now, borrowers need to clearly understand that we are not yet out of murky financial waters.
Author: Jenny Challenor
January 10th, 2008
Category: Mortgages.
