After a harrowing year in the financial markets, the Bank of England has finally cut interest rates of Mortgages by 0.25 per cent to 5.5 per cent.
Homeowners have been waiting for this to happen for several months as the US federal government continued to cut interest rates given the subprime crisis that started to unravel around June 2007, sending the stock markets around the world reeling. The rate cuts are also quite timely given the rising costs of living due to the high oil prices that have hovered around the US$90+ range for months and shows no signs of going back to reasonable levels, if ever.With the spectre of inflation hovering, or should I say, invading every country, no one is really sure about how high basic costs will become. So the lowering of interest rates by the banks is a very welcome one indeed.
For those who are still in a bind financially despite the lowering of rates, consider getting a 125% Mortgage a mortgage that consists of a 95% mortgage take-up linked to an unsecured loan of up to 30% of the value of the property, with both elements being charged at the same interest rate. For myself, I’m not sure whether to refinance and get a fixed or variable rate loan as the markets are so uncertain at the moment.
