By Ed Emerson
UK self-employed mortgage seekers are enjoying the lowest interest rate environment in more than 300 years.
What that means is that there are incredible opportunities around for anyone looking to take advantage of historically cheap UK self-employed mortgage deals.
This all came about after the recession of 2008/09, when the Bank of England drastically lowered what’s called the “base rate” – that’s the interest rate set by the Bank of England for lending to other banks.
It’s like a benchmark for interest rates in general.
And right now the base rate is 0.5%.
Let me put that into perspective for you from a savers perspective, and then from a borrowers point of view.
If we’re talking about savings, then back in say, mid-2007, just before the Northern Rock fiasco, you would probably have been offered about 6% on a savings account.
That means it would take you approximately 12 years to double your money if you just left it alone. That’s actually pretty good for an absolutely no-risk investment.
By comparison you’d be lucky to get 1% on a savings account since the recession seven years ago.
In practical terms that means it will now take you 72 years to double your money.
That’s not a misprint. It’s a fact. The bottom line is that low interest rates are bad for savers.
But there’s always a balance when it comes to money, as periods of low interest rates are terrific for borrowers!
Why? Well, that’s because UK self-employed mortgage seekers can borrow money far more cheaply than when the economy is doing very well.
Once again, by comparison back in mid-2007, just before the proverbial shit hit the economic fan, the Bank of England had set the base rate at about 5.75%.
As noted above, we have been enjoying a 0.5% base rate since it was announced over seven years ago on Thursday 5 March 2009.
And this brought about an opportunity to borrow money at historically low levels of interest.
Remember, we haven’t been able to borrow money this cheaply in three centuries.
So, you can assume with some certainty when that rate eventually goes up, we will likely never see rates come down as low as this again.
At least not in our lifetimes.
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 a UK Self-Employed Mortgage out soon, and take advantage of the mistakes others have made so that you don’t have to.
Ed Emerson, Editor, HNW Magazine