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Clarity for homebuyers - but no surprise - in Governor's forward guidance


At first glance, this morning's news isn't. Homebuyers having been living in a low interest rate world for years now, and the early signs are that we won't see much change as gilt yields and swap rates, which dictate mortgage rates, haven't really flickered in response to Carney's words.

Forward guidance does give us an element of clarity on what we've been expecting for some time though, and anyone on variable rate deals who had been worried about the recent evidence of economic upturn trickling through to have an upward effect on mortgage rates can sleep better at night.

The vast majority of homeowners taking on a new mortgage deal are already going for fixed rate offers thanks to years of historically low rates so the question has long been how long do you fix for if you're set on that approach. Clearly, short term offers are no longer worth bothering with. And if you are on the brink of a new loan, then there's no huge rush, particularly if yours is a tracker.

What homeowners do have, with rates remaining low and house prices on the up, is a great opportunity to reduce the loan to value percentage on their property - thus securing the best of the good deals of the future.

So it's probably all good news if you're a homeowner, but it has never been so important for savers to wring the very best rate they can out of their cash.