Every month this year the Bank Of England have said rates won’t rise until next year. Well now it looks like it’ll happen much sooner. Possibly by September or October.
What Does This Mean?
They’ve been at 0.5% for a while now, but before the crash in 2008 they were around 4 or 5%. When they go up it’s expected to be gradual, rising at small amounts over time.
How Will It Effect Me?
Interest rates affect a fair few things. The most likely to be relevant to you are if you have savings or a mortgage.
If you have a tracker mortgage (one that follows the interest rate), any rise will mean your payments will go up. It’s worth using a mortgage calculator to see how much that may be.
It’s better news for savers as it’ll see much better rates you can earn. They’ve been so poor for the last 12 months or so that current accounts have been the best place to put your money (read our 6 Ways To Make Your Bank Pay).
What Should I Do?
Mortgage owners should check their outgoings to see whether any rise could be a problem. You can use our budget guide and template to help you figure out if and where you’ll need to cut back.
Savers should just keep an eye out to see if any ISA or savings accounts have better rates than their existing ones. If you are confused about savings accounts, here’s our guide to the different types.
Remember though, it’s just speculation. Until it’s announced no one knows when or by how much it’ll change!