Wednesday, 30 May 2007

Buying a house

Since the Bank Of England raised the basic interest rate to 5.5 percent not too long ago, it is predicted to increase up to 6 percent soon. What would be the impact on people trying to buy houses and flats then? Simple. Not many people will not be able to buy any house at all due to the rise in interest rates.

For thoe who still want to buy property in the market, they can still do so. They can take out a fixed rate mortgage for as long as the bank or building society can offer. That would ensure that they will not be paying more when the interest rates were to increase in the next quarter or so. Normally, house buyers would be able to apply for a fix rate mortgage for the first five years. It really depends on the specific banks and building societies in terms of the duration of the fixed rate mortgage.

House buyers who are thinking of buying and then letting it out to people might have to sell their property due to the rise in interest rates. Besides that, the returns from buy to let property is so much lower than before. It does not make sense to do that unless one has finished paying his or her mortgages. That would be a different story.

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