Bank of England base rate still at 0.5% (as at 12th November 2009)

By Phil Yates, CertPFS CertsCII(MP&ER)

In March 2009 the Bank of England reduced the base rate to 0.5% and in November the rate is still at the same all time low. 

The financial experts and economists all predict that interest rates will stay low for the next 2 years but who really knows? 

In November 1989, 20 years ago, the base rate was 15% and who would have predicted that in 2009 it would be 0.5%? 

House prices seem to have bottomed out and mortgage lending is increasing so we could have a new house buying burst in the early part of 2010. 

There are still fixed rate mortgages for those borrowers wishing to have some stability on their mortgage payments but if you think that you can weather any increase in interest rates then the tracker schemes are very popular, particularly if you have a good deposit. 

Our advice is to look carefully at your budget before committing yourself to a new mortgage and try to consider any factors that may upset your plans by taking out payment protection and life cover with critical illness.