The Bank of England has again taken the difficult decision to increase interest rates in response to inflation.
The effect on your current finance agreements and mortgages is dependent on whether your agreement is a fixed rate agreement (which is most common in asset finance and unsecured loans) or a variable rate agreement, which your mortgage normally defaults to after a fixed period.
If you’re currently in a fixed agreement, you have nothing to worry about as your rate will remain exactly as it is for the remainder of your agreement. However, if you are on a variable rate at present, unfortunately, you will see an increase in your rate. If this is you, and you are worried about potential future increases, it might be a good time to look at switching to a fixed rate or refinancing your agreement.
The announced rate increase causes banks who raise money directly from the Bank of England to be charged more to borrow money. This could unfortunately mean some banks and funders will increase rates for the new agreements.
However, not all lenders raise their funds via the Bank of England, so it’s important to shop around or use a finance broker to find the most competitive funding for your needs.
If you have planned expenditures coming up, it’s important to consider acting quickly. With further rate increases likely and inflation further increasing prices, the sooner you can act to secure long-term fixed rates and current prices for the assets you are purchasing, the more competitive you can be.
If you’d like to know more about how Moorgate Finance can assist you or just to discuss any potential asset purchases or refinancing of the agreements you are considering, give our specialist team a call today on 01908 92 62 62 .