Interest rates going back up

IF YOU have been considering trying to renegotiate your mortgage rate, it is time to act – as rates are starting to go up again after months of drops.

However if you are looking to buy there is no need to panic, experts say – any changes are likely to be small for the rest of this year and rates will remain accessible.

In recent days several banks have started putting up their rates slightly – a trend which has attracted attention among financial commentators.

There are different theories as to why this is. Are the banks trying to push those hesitating to take the plunge and buy now? L ‘Express Votre Argent says no, it is more likely they are trying to slow things down a little because they have seen so much interest lately that they have too much work to do.

If you are looking at buying there is probably no huge rush, as the increases are small at present – 0.1 to 0.25%, and so far have only been seen at banks which had the best, most competitive rates and have slightly eased back on them.

They are not likely to change very significantly before the autumn and even then there is no reason to assume they will move dramatically, says L’Express Votre Argent.

On the other hand if you want to renegotiate for the best possible rate, you should probably do so as soon as possible.

Capital has similar predications - the trend is likely to be followed by most banks, but rises should remain moderate.

Mortgage broker Sandrine Allonier told the magazine that at the worst, rates might rise about 0.3% by September, which would mean an average of 2.6% over 20 years – still accessible compared to January 2012, when the average 20-year rate was 4.3%.

Capital cites banks that have already raised rates as including LCL, Caisse d’Epargne Ile de France, Société Générale and Banque Tarnaud (a private bank which is a subsidiary of Crédit du Nord).

Other banks’ rate committees have meetings scheduled in the next few days.