The interest rate was left sitting at its historically low record level for yet another month when last week the Bank of England’s Monetary Policy Committee voted to hold the rate at 0.5%.  The rate has remained unchanged since March 2009.  This will keep borrowing low and affordable and offer even more recovery time for the British economy.  In months past, the committee has voted unanimously for the rate to remain unchanged but expectation is that the committee will start to divide and some members will begin to vote for an increase.

How the members voted will not be known until the minutes from the meeting are released in approximately two weeks.  It was expected that the August meeting would be the month in which members began to express a more assertive move toward a slight increase to the rate.  The rate, it has been told, will increase slow and steady over the next few years.  The British economy has recovered more strongly than others and the UK will likely be the first of major world economies to increase their Bank’s rate.  The forecast from economists is that it could occur as early as the end of the year or in early 2015.

As warnings begin to become more pronounced and the tone of the MPC meetings is made clearer there is an expectation of higher demand for mortgage and remortgage loans.  Currently deals available are still attached to low interest rates but lenders may begin to change those as demand grows stronger. 

Homeowners are encouraged to take into consideration an entire remortgage deal, including any penalties for switching to a new deal, any legal fees or valuation fees along with the interest rate offered.  By considering the full cost and interest rate savings of a remortgage, the homeowner will have a clear indication as to the best deal for their needs.  Sometimes it is not the deal with the lowest rate that offers the greatest savings for a homeowner.