The economy is on a path of strong recovery, so says the Bank of England. In fact, the recovery is expected to be stronger than it has been in almost 70 years. The UK economic growth outlook strongly puts aside any anticipation of further cuts to the standard base interest rate by the Bank. Therefore, rather than cheaper borrowing ahead with further interest rate cuts, borrowers should be ready to face more costly borrowing, especially in large borrowing situations such as seen with mortgages and remortgages.

The current base rate set by the Monetary Policy Committee (MPC), the rate setter committee of the Bank, is at an historic low of 0.1%. Many had expected that without a strong recovery path in sight the Bank would, for the first time in history, issue a negative interest rate. Now with the strong and positive outlook that has been pushed aside.

It could be that many borrowers were waiting out the opportunity to save more should that have occurred. However, there is now the risk that the current low interest rates of today could begin to disappear. 

Lenders have already started to become less competitive as the housing market has been booming and spending has been strong by consumers. Less competition for borrowers means fewer attractive deals and instead ones that borrowers must settle for and the best savings will disappear. While saving money is good, no one wants any condition to reappear to push our economy to the brink that made the current 0.1% necessary ever again. It is therefore a good thing to see the low historic rate indeed become history.

Experts are encouraging homeowners and hopeful home buyers to take action sooner rather than later to take advantage of the borrowing deals now available. Locking in a long term savings through a fixed rate for years to come is also suggested to avoid the rising rates surely to come as early as late this year or the beginning of next.

Even if the Bank’s MPC delays increasing rates, it doesn’t mean that the low deal products offered by lenders today will remain on the market for months to come. Lending has been strong, and there is little reason to offer the lowest rates on the market when borrowers are a plenty right now and due to continue to show attention. 

If a remortgage or mortgage was on the list for the summer or fall, perhaps it would be wise to push it up the priority list and begin shopping now while rates are still very affordable and deals offering the lowest interest rate savings are still active.