What’s happening with interest rates ??

The news on the street is that another rise in Bank of England base rate is pencilled in for their February meeting – the result of which is due on Thursday 3rd February. Consumer price inflation rose to 5.4% in the year to December 2021 and expectations of inflation becoming an ongoing rather than temporary issue are starting to rise. This could be exacerbated by a further spike in energy costs if the Russia/Ukraine situation worsens.

Is it a good time for fixed rates? Well a five year fixed rate is still at fairly reasonable levels, with the five year “swap rate” (this is essentially the base level cost of a fixed rate without any profit margin added for a lender) at around 0.82% p/a. Whilst this swap rate has increased from 0.15% a year ago (wow – that was low!), the present rate suggests that the market hasn’t (yet) priced in the wilder predictions of where bank of England Base rate might eventually go in the next few years.

So in our opinion, fixed rates still look like reasonable value, and (dependent on your individual circumstances) still offer a good way of managing/protecting your interest rate risks.

We can obtain fixed rates in connection with all nearly all commercial mortgage and buy to let mortgage lending, so please come for a coffee and natter about your options!