Bank Rate still 0.5% in 2017? Anything’s possible…

Posted on 8 January 2013 by Drew

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Keen observers will have seen that Citi, the great American Bank with a large presence in the UK, have nailed their colours to the mast for bank rate to stay exactly as it is until mid-2017.  We’ve said countless times that bank rate is going nowhere fast, but even we haven’t gone as far as five years from now.  So, what do we think?

Well, it would be a brave person to stick their house on it, but we think there is broadly a 50/50 chance of it coming true.  Now, this is not the greatest example of fence sitting known to man, rather a genuine belief that we may just make it to 2017 still rooted to the floor.  What we will say is that if it does move, baring something monumental, banks rate will still be very low in 2017.

What does that mean for those who need a mortgage now?  Do you fix for a couple of years?  Are 5 year fixed rates still the answer? Should you look at the variable market? 

It really depends on you.  Generically speaking, the longer you expect bank rate to stay the same the more of a case there is for taking a two year fixed rate now, as they are around 0.5% cheaper than their five year counterparts.  But, of course, you will have to remortgage again in two years.  What you’ll get then is anyone’s guess.  There’s just so much to consider.  As ever, we’re here to help so do get in touch.


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