Interest Rates

[Webmaster]

Are the current increases in UK interests rates affecting you and your mortgage? I'm lucky to have a 5 year fix so have a few more years of grace, but i'm sure not everyone is so lucky!

[bumblelion]

I have heard or read somewhere that fixed rates are soon not going to be offered by some lenders. Anyone else heard this?

[geoff]

They are being withdrawn due to the impending interest rate increase next month. They will then be offered again at a new rate.

[ali]

Alliance and Leicesters website states tht they have withdrawn their fixed rate mortgages but will announce new ones on the 23th April. Guess everyone is in a flap after the latest inflation figures. Funny a few weeks ago all 'experts' were certain that they may only be 1 more rise and that would happen towards the end of the year. Now people are talking about even a suprise 0.5% rise at the next Bank of England meeting!

[Webmaster]

Since I originally posted this topic it does look like interest rates are going to move up. I've been looking at some scary figures, the baseline inflation rate is 3.1%, but if you include housing costs then it jumps to around 4.9%. It is even higher for pensioners (who are generally badly afffected by council tax rises).

I particularly alarming statistic is that with inflation running at 4.9% think about what is happening to your savings! Every year they become worth less and less unless the bank interest rate is higher than inflation. If you are a basic rate tax payer then you need a bank account that pays 6% or more (maybe just about possible), but if you are in the higher tax band you need to earn a whopping 8% on your savings to cover inflation! Pretty much impossible.

The only safe havens are ISA's and National Savings Bonds, both are tax free and thus make it much easier to inflation proof your hard earned money.