Is it Time To Fix Your Mortgage.
We have covered at length the global credit boom this week and warnings from many sources of a potential economic collapse due to global debt.
In the UK, the Bank of England has made stronger hints than seen in the last few years that the case for increasing interest rates may be sooner rather than later and could be as early as December.
In addition, the Financial Conduct Authority (FCA) has written to all banking groups asking them for written plans on how they will deal with another financial crisis and asking them to boost capital reserves to protect against any economic crisis. In addition, higher inflation i.e. prices have risen, with lower ‘spare income’ leaves people with even less money to be able to cope with ant interest rate rises meaning the chances of ‘toxic debt’ are back again. The FCA has already implemented changes to force lenders to lend ‘more responsibly’.
Credit may be more difficult to get in the future, interest rates may be higher and the days of cheap mortgages, cheap car loans may soon be over.
There are still competitive and low interest rate mortgages available, but they not be for long if there is a rush and lenders use up their quotas. If a lender let’s say has secured a funding tranche for £100m of fixed rate lending at say 2.5% pa, this could be used up in days let alone weeks or months.
The question is in the news story title: Is it Time To Fix Your Mortgage? Should you make your position secure before rates go up?