Last post: Jul 25, 2018
The Bank of England is expected to raise interest rates on 2nd August 2018. These big decisions may seem distant, but they can have a big impact on household finances. What will an interest rate rise mean for your money?
When
big, top level financial decisions are made over at the Bank of
England, it's easy to feel like they won't affect us. However,
when it comes to interest rates, all of the tweaks and changes the
money-men & -women make have an impact on our household finances.
On 2nd
August 2018, the Bank of England is likely to raise interest rates.
But what will this mean for you and your money? We've broken it
down for you, so you can be in the know before it hits your bank
balance…
Savings
Interest
rates have big impact on savings. For many years now, savings have
been very meagre as interest rates have been at rock bottom.
Unfortunately,
an
interest rate rise this
August probably won't do much to boost your savings (especially if
you're using an instant access savings account with an interest
rate of around 0.05%). This is because any interest rate we see is
likely to be very small and because banks are not the best when it
comes to passing these savings onto customers.
Mortgages
If
you're on a tracker mortgage or a variable mortgage, an interest
rate rise will mean you'll be paying a little more towards your
mortgage with each repayment.
Once
fixed deals end, you may also find yourself shouldering higher
repayments. Those on the hunt for a mortgage may find the "rock
bottom" rates we've seen in recent years much more difficult to
obtain.
Debts
Households with debts are also
likely to see repayments increase as the interest rate rises. With
many households overspending in 2017, this may mean many families
will be forced to budget a little harder to shoulder repayments.
At Choice Personal Loans we connect customers with the right financial products for their unique circumstances. To find the best fit loans and mortgages for you, contact our finance experts today.
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