Interest Rates Increased To 5%
NOVEMBER 9TH, 2006
| Credit Cards (introductory rate & period) |
Typical APR | Options |
| Virgin Credit Card 0% balance transfers, 13 months ( 2.9% balance transfer fee ) 0% purchases, 3 months |
15.9% (variable) |
 |
| Post Office Credit Card 0% balance transfers, 8 months ( 2.5% balance transfer fee ) 0% purchases, 3 months |
14.9% (variable) |
|
| Personal Loans | Typical APR | Options |
| Moneyback Bank Personal Loan | 5.7% | |
| Northern Rock Personal Loan | 5.8% | |
As expected the Bank Of England lifted interest rates to the 5.0% mark. This is now the highest level it has been in five years.
The Bank's Monetary Policy Committee (MPC) are looking to hold back the inflationary pressures after reports this month of 1.7% increase in house prices during the October month.
More and more households are folding under the pressure of higher overheads from their council tax and energy bills. A record 27,644 people became insolvent during this summer which could result in over 100,000 going bankrupt or taking out individual voluntary arrangements (IVA) during the 2006 year.
Interest rates are now at their highest sine August 2001.
A homeowner with a mortgage of £80,000 will have to find an extra £13 a month amid the interest rise.
Those who fixed their mortgage rates will not need to worry until their fixed term comes to an end. A long term arrangement of 5 years could be a good deal if as expected further rises go ahead in February.
If inflation continues to stay above the 2% target - currently at 2.4% - the MPC will act with further increases.
The move is likely to hurt those who are already struggling to manage. It will deter some from purchasing properties including first time buyers due to the higher monthly payments.
This rise is predicted not to bring house prices backwards but should help to slow the increases. This still is not enough to help first time buyers struggling to afford to purchase a property.
