MortgagesAug 14 2013

Carney’s pledge ‘welcome news for homeowners’

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The new Bank of England governor’s announcement last week, which stated that the rate would remain at the historical low level until 2015, was “welcome news for homeowners” said Charles Haresnape. There were, however, conditions linked to this base rate. If unemployment dropped below 7 per cent, or if there were changes to CPI inflation or a threat to the country’s long-term financial stability, the rate was subject to change.

The managing director of Aldermore Bank said the governor’s assurance “provides some much-needed guidance from the Bank on where rates are going.

“In today’s economic climate, given forecasts suggest it will be 2016 at the earliest before rates rise, homeowners will be looking more closely at longer-term fixes or choose a tracker for the foreseeable future.”

Danny Cox, head of financial planning at Bristol-based Hargreaves Lansdown, said that despite the benefits to the mortgage market, and potential improvements to the already “ultra-low” mortgage deals available, savers would lose out.

Residential Mortgages Managing Director for Aldermore, Charles Haresnape, said: “While nothing is ever certain in today’s economic climate, given forecasts suggest it will be 2016 at the earliest before rates rise, homeowners will be looking more closely at longer-term fixes or to choose a tracker for the foreseeable future.”

Adviser view

Brian Murphy, head of lending at national advisory firm Mortgage Advice Bureau, said Mr Carney’s policy of forward guidance set to prolong a “golden age of fixed mortgage rates”. He said the policy could provide lenders with further impetus to offer even better deals, adding: “Mr Carney clearly expects the mortgage market to continue its recovery.”