First Interest Rate Hike in a Decade Likely to Occur This Week
There are many within the housing community in favor of a hike in interest rates which is expected to take place this Thursday. A feeling exists that the increase will offer a shot in the arm to the market and help curb inflation. There are also opponents of the hike. They feel the hike will only lead to stagnation and lack of optimism just before the holiday season. Savers are encouraged for the first time in years as they will see their money start to grow again.
Homeowners across the country share in many different opinions. The group is likely breathing a sigh of relief if they chose to remortgage back when the increase was only a passing rumour. There are many however who chose to wait until the last minute to obtain a new deal. That group already has car keys in hand for the morning commute which will take them straight to the lender.
Although the hike, which many feel is inevitable this week, is taking place, many are taking it with their next breath due to the estimated amount it will be. The base rate is expected by many to increase from the current level of 0.25% to 0.5%. This will be a modest hike and will affect lower mortgage payment amounts just slightly. The main concern is over what will take place in the near future.
Some feel this could be the start of a rash of increases whereby mortgage payments ride a slippery slope and increase every few months. Housing experts see this as a potential kickstart to activity which currently is sitting in a bit of a lull period.