Interest rates have gone up from the lowest rates since the Bank of England started in 1694. Psychologically we become resistant to increasing or replacing a mortgage when rates have just gone up. However, interest rates are still incredibly low and in so many ways I feel the only way is up.
I read an interesting article in the Financial Times on Saturday when Paul Lewis discussed very well the history of interest rates.
I agree it would not be surprising to see interest rates at 4% or 5% with the economy returning to normal which naturally will make borrowing more expensive in the future.
We all like to revel in our successful decisions and so often seemingly forget the bad ones. One of my excellent colleagues in our mortgage division Arron replaced my mortgage around four months ago. He managed to secure a five-year fixed rate for me at under 1%. If rates are currently double or treble that I believe we should not hold back when considering a new mortgage or remortgage.
Paul Lewis refers to a book by Sidney Homer and Richard Sylla on “A history of interest rates.” That will be good bedtime reading.
Trevor Downing FPMI FPFS
