According to the Mortgage Advice Bureau interest rates are now officially at the lowest they have ever been.
As the Bank of England Base Rate remains at its lowest point since 1971, banks and building societies have set their interest rates at their lowest since records began in 2007.
The last time the Bank of England increased its Base Rate, Leicester City had just been crowned champions of League One, Avatar was taking over the cinema world and Lady Gaga had just released her debut single, ‘Let’s Dance’.
A lot has changed since then, and interest rates have fallen yet again, despite predictions last year that they would increase at the turn of 2016.
How much have they fallen by?
It’s important to remember that the Bank of England Base Rate still remains at 0.5%. However, it is the bank and building society rates that have fallen, with the average reducing by 0.05% to their lowest ever levels.
Why have they fallen?
The current erratic global financial markets and the upcoming EU referendum mean that confidence within the UK has fallen. To increase rates now would be a dangerous move by the Bank of England as nobody can be certain as to what the result of the referendum will have on the economy.
With the market hesitant, Bank of England governor, Mark Carney, announced a couple of weeks ago that the Bank could actually cut interest rates to zero as it looks to boost to the amount of spending in the UK.
According the the Bureau, if the Bank and the Monetary Policy Committee do decide to cut rates once again, it should only be a temporary measure whilst the current wave of uncertainty disappears.
After the result of the EU referendum has taken its toll and the markets have calmed, it is expected that rates will slowly begin to rise again. The aftermath of the referendum will take a while to take hold so this could be around this time in 2017 that this happens.
Consequently, it seems now may be seen as the prime time to look at re-mortgaging or getting on the property ladder before rates do rise.