As you can guess, and as we have often written in the past, loans will no longer be as cheap as they are now. There is no problem with this, as it has been a long time since we were able to borrow at record low interest rates. So treat it as a ready fact that interest rates are rising. And let’s act!
We are not throwing words so big that an historic event has happened, but the fact is that we need to go back in time to 2011 to find something similar. Namely, the Hunasan Bank implemented an interest rate increase.
The Kingswood Bank base rate remained at 0.9 per cent, but the overnight deposit rate (available to banks) remained at 0.1 percent.
The significance of this is not interesting because of the numbers, but because it first happened after more than 7 years. We do not think we need to wait for the next increase, unfortunately, as inflation has reached the point where interest rate adjustments will begin. This can also cause major changes in loans , specifically loan interest rates.
Why is it important for homeowners?
On the one hand, those who are preparing to take out a loan must be prepared for a higher monthly repayment. There’s really nothing to do with it, but there’s no need to worry. We are amazingly far from lending rates 10 years ago. However, there are some who can act.
They are the ones who already have credit. We are thinking precisely of those who did not opt for the now popular fixed rate loans. That is, it is not so-called 5 to 10-year contracts, but so-called floating rate loans. Typically, these contracts have a term of 3-6 months, during which the interest and thus the monthly installment remain unchanged.
Since the rise in interest rates has begun, it is now worth replacing your existing loan with one that has at least an interest period of 5-10 years. This way, you can save yourself an unpleasant monthly increase in spending. It’s not too late now.
Do you have a variable rate loan? Then contact us! We find the ideal solution for you not to face the unpleasant rise.