Homeowners told to switch to fixed deals ahead of rate rise
THE BANK of England is almost certain to keep interest rates at their historic low of 0.5 per cent today – yet with lenders increasingly expecting a rise to come within the next year, rates on mortgages and credit card are creeping upwards.
The average credit card annual percentage rate (APR) has climbed to 18.17 per cent – its highest rate since July 2001 – according to Moneysupermarket data published yesterday.
The money advice website also revealed that mortgage rates are steadily rising. Average two-year tracker rates are now 0.29 percentage points higher than last February, at 2.79 per cent.
Moneysupermarket’s Clare Francis advised homeowners to consider switching to fixed-rate deals ahead of a rate hike.
“Millions of people are currently paying their lender’s standard variable rate and these rates will start rising when base rate goes up, so now is the time to consider moving onto an alternative mortgage,” she said.
“For those with money to spare each month, now is a good time to overpay on your mortgage. Cutting the size of your debt will be beneficial in the long run when rates go up – which they will.”