By Ed Emerson
Attempting to predict the next interest rate rise has become something of a sport amongst market analysts, yet something to be ever mindful of for self-employed mortgage seekers; despite these so-called experts’ horrific record of crystal ball future-gazing.
In short, little has changed since the Bank of England (BoE) reduced the base rate to 0.5% back in March 2009, and we expect an equal level of flat-line interest rate decisions into the near future for a few reasons.
And while we’ll focus on a few of those below for you – our self-employed mortgage-seeking readers – as always these come with a health warning:
No one beyond the hugely complex financial markets themselves, and only thereafter the BoE Governor Mark Carney, can know what’s coming next.
Folks have been calling for, expecting, and sometimes even demanding a rise for over seven years now, all of which has fallen on deaf ears.
Our perspective on this should be different.
If you’re after a self-employed mortgage, or any mortgage for that matter, you should be rooting for more of the same…..or less of the same, so to speak, as the latest rumours suggest there could be a drop in rates before any rises on the horizon.
But this is all navel-gazing.
The most likely reason we could be in for a quiet summer in the interest rate space is based on plain old fear more than anything else.
The reality for self-employed mortgage seekers is that we’re living a charmed existence at present, one that many who don’t take up the opportunity to lock themselves into ridiculously cheap long-term fixed rates will likely (and exponentially) regret in hindsight not so many years from now.
Always ever-present is the problem of acceptance in any financial scenario.
Simply put, we get used to things being as they are, and thus grow blind to the advantages and/or disadvantages as perspective sneaks out the door with time.
Where we are just now is the lowest interest rate environment in Britain’s history – the cheapest borrowing environment – and why there hasn’t been an absolute swarm of borrowers packed into mortgage lenders’ office like lemmings is anyone’s guess.
It’s most likely down to that fear of the future.
Yet the simple truth here is that the likelihood of rates raising has far more leverage than any continued or sustained fall.
We’re near the basement of 0.0%, folks, and the lift stops here.
Self-employed mortgage seekers would also be well-placed to keep an eye on the stock markets and other financial playgrounds for clues about where things are headed.
As HNW Magazine has espoused many many times over the last six years, this recovery and subsequent bull market appears to have the horsepower of the burgeoning Millennials of Generation Y behind it – the largest age cohort since the Baby Boomers helped drive an 18-year bull market from 1982 to 2000.
That means growth. Growth happens, and is driven by, rising interest rates.
And the fear being pumped through the headlines by the media everyday will not be able to avoid the economic indicators forever, particularly once the financial gyrations and implications of Brexit and the US Presidential election result at the end of the year work their way through the system.
Bet on rising rates in future, and check out the six UK lenders that HNW Magazine has identified through its research who focus on and actually lend to self-employed mortgage seekers, as well as our forthcoming report The 5 Steps to Getting a Self-Employed Mortgage.
Want to know more?
Why not see what HNW Magazine’s Self-Employed Mortgages section here has to offer you in terms of advice, guidance and options.
And look out for HNW Magazine’s report The 5 Steps to Getting a Mortgage When You’re Self-Employed for consultants, freelancers and entrepreneurs, out soon, and take advantage of the mistakes others have made so that you don’t have to.
Ed Emerson, Editor, HNW Magazine