During a Sky News interview, Sir Bean also agreed that there is a possibility of rates returning to 5% in the long term.
Since March 2009 the bank of England has chosen to hold interest rates at just 0.5%, however many leading figures in the UK economy are now predicting that rates are set to start a steady increase. Indeed, Bank of England Governor, Mark Carney, has recently stated that by 2017 the base rate could possibly rise to a ‘new normal’ of 2.5%.
A rise in interest rates is of course good for savers, but could have a detrimental impact on homeowners. Although Mr Carney was very clear that rate increases would be approached in a gradual and limited fashion, any rises are likely to have an effect on the overall cost of mortgage borrowing. With this in mind, those who are planning to move or remortgage in the medium term may be wise to speak with a mortgage expert sooner rather than later. Qualified mortgage consultants often have access to mortgage products that aren’t directly available to the public and also have the knowledge and experience to advise clients on the impact of the possible rate rises and the affect this could have on a borrower’s individual circumstances.