FinanceTeam

Interest Rates start increasing again

We don't want to be the bearers of bad news, but the quarter point in crease in interest rates this month may only be the first of two or threee increases to come we think. Figures such as inflation rates and consumer spending indictate that interest rates need a serious correction to prevent inflation getting worse. The Bank of England may have already decided that at least a half percent is required but had chosen to deliver that in bit sized chunks.

Mortgages

The worry of higher interest rates doesn't seemd to have had any effect on mortgage growth just yet. Figures are still on the increase, but if rates go up again next month, people may start to think again about taking on large mortgages which may be difficult to repay.

In order to sustain growth, mortgage companies are already lending over longer periods and allowing people to take higher income multiples.

PPI Insurance

PPI or payment protection insurance is a useful add-on to many loans, especially where people are worried that they would not be able to keep up monthly repayment commitments should they become ill or lose their job. But Which? magazine is worried about how these policies are sold. They think loan companies should be more transparent about what customers are signing up to. The Competition COmmission is now looking further into the area.