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Screensize: 640 x 480 800 x 600 1024 x 768 1280 x 1024 UserName: Password: Format Mode: Basic  Help  Prompt  Format: Font Andale Mono Arial Arial Black Book Antiqua Century Gothic Comic Sans MS Courier New Georgia Impact Lucida Console Script MT Bold Stencil Tahoma Times New Roman Trebuchet MS Verdana   Size 1 2 3 4 5 6   Color Black Red Yellow Pink Green Orange Purple Blue Beige Brown Teal Navy Maroon LimeGreen Message: * HTML is OFF * Forum Code is ON Smilies [quote][i]Originally posted by BankruptcyNews[/i] [br]Is the rate peak in sight? Interest rates have risen to their highest levels for six years, and there could be more rises to come. Borrowers will suffer, and there is no guarantee that savers will feel the full benefit. Here, SYLVIA MORRIS and GUY ANKER explain how to make the best of the situation. Bank of England base rate could rise again from its current 5.5%, possibly to as high as 6% by the end of the year, leading economists predict. This could send mortgage rates to 8%, adding a further £380 a year to the cost of a £100,000 repayment loan. Monthly repayments on a £100,000 repayment mortgage have already risen by £60 since last August, and by £145 on a £250,000 home loan. On the other hand, if these predictions come true, savers could see rates on the best internet accounts climb to 5% after tax (6.25% before tax), giving an extra £40 a year interest on every £10,000. A total of 14 of 61 economists polled by information providers Reuters predicted base rate would climb to 5.75% or higher later this year to combat inflation. Roger Bootle, from Capital Economics, says: 'I would not be surprised to see another 0.25 point rise next month. It might eventually need to rise to 6% or even higher to secure low inflation.' Professor Peter Spencer, from the Ernst & Young ITEM club, which bases its predictions on the Treasury model of the economy, says: 'We forecast base rate at 5.5% at the end of the year. We might just get away with that level, but there is a 40% chance that we will see another rise in August.' Danny Gabay, from financial consultancy Fathom Consulting, says that while there is some concern rates could rise, 'our view is that they have peaked. Inflation could fall aggressively over the year, meaning pressure on the Bank of England will dissipate.' But money markets, where financial institutions trade money, are predicting higher rates. Moyeen Islam, fixed interest strategist at Barclays Capital, says: 'The market is pricing in base rate at 5.75% in November or December. One-year money is trading at 6%. We think 5.5% is the base rate peak, but would not be surprised if it moves higher.' With this range of views among economists, both savers and borrowers face tough decisions in the coming months. SAVERS must be on their guard because banks and building societies have a range of tricks when rates change: • Delaying the rate rise. Tesco savers have to wait six weeks - until June 20 - for their 0.25% rate rise to kick in. The Post Office Instant Saver will passed on the full rise paying 3.8% (4.75%) excluding the initial bonus, but not until June 4. • Failing to pass on the full rise. Base rate rose by 0.75% between August last year and January this year, but Abbey Investor 60, Investor Account, and Flexible Saver account holders got just 0.3% of the potential 0.75%, as did Alliance & Leicester Instant Access customers. Some with Halifax Savers Reward saw an insulting 0.26%. Also in the doghouse are Lloyds TSB Online Saver and Instant Gold (both up 0.4%) and National Savings & Investments Easy Access Savings account (up 0.35%). • Ignoring the rise. ING Direct refused to pass on any of the November and January base rate rises to its savers. Under the Banking Code, banks must write to tell you when the rate on the account moves by more than compared with any base rate move and have 30 days to do so. So they can ignore increases with impunity. • Juggling tiered rate. Some savers in an account receive the full rise, but those with the 'wrong'amount saved may get less. Watch out for the words 'up to' when describing a rise. • Trapping savers. Those in accounts which demand notice of withdrawals are especially vulnerable, because rates can be frozen and you can't get at your money without penalty. Source: thisismoney.co.uk See my Blogs: http://bankruptcynews.blogs.bankruptcyhelp.org.uk [/quote]   Check here to include your profile signature.