Following the Bank of England's decision to leave interest rates at 3.75%, mixed reactions have been received.
Many people expected interest rates to be cut, as they were by the European Central Bank. However, they have remained the same for the time being.
Some industry commentators predicted a fall in interest rates. But, as that has not happened, predictions have been revised to a rate of 3% by 2004. This would mean at least one and probably two or three rate cuts between now and the end of the year.
With interest rates for borrowing being so low and stable at the moment, this could be an excellent time for first time buyers and also existing homeowners to look at their borrowing needs and existing mortgages.
Our View
There are many attractive fixed, discount and tracker rates available but you should always look at the whole package being offered. Some of the lowest rates will have penalties included if you want to move away to another lender and these can be expensive. Also, some fixed rates may tie you in for a long period but, what if you are locked into a fixed rate and interest rates fall again. This would mean paying more than necessary.
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