FinanceTeam

Cheaper Mortgages

Interest rates were finally cut in the UK last year in December, but many mortgage providers failed to pass on the reduction to their customers. That may change in February if another interest rate cut is approved. The likelihood of that is now much higher after the shock cut in US interest rates two weeks ago when a reactionary move saw their rates falls by 3/4 of a percent. A further cut is on the cards this week, perhaps a further quarter percent and that will certainly lead many to expect a UK cut next week, not only in base rates, but this time on loans and mortgages too.

Cheap Loans still available for some

The main cause of the global credit crunch is said to be the provision of loans and mortgages to people with poor credit records and questionable means of repaying those loans. But for borrowers with clean credit records and suitable means of income to make sensible loans affordable the landscape has barely changed. Interest rates are largely the same as they were last year, only the loan acceptance criteria have changed, meaning very large loans may be less readily available.

Finance costs remain stable compared to other household bills

If you think mortgage payments and the cost of credit card and loan repayments place big demands on your household budget, then prepare for some unexpected invaders in the months to come. Increases in Council Taxes and energy bills means that just these two costs could be taking around £2000 out of your bank account each year, with owners of larger houses paying even more. Add to that the highest petrol prices ever seen and increasing insurance costs, there's no wonder retail sales are down - people just don't have the spare cash anymore. We're expecting the next big downturn to be seen by the travel and holiday trade. January is traditionally a big month for holiday bookings, so expect some miserable announcements by the big holiday companies in March or April.