It has been almost seven years since the Bank of England originally cut interest rates to a record low of just 0.5%. Originally announced back in 2009, it brought interest rates to their lowest level in more than 300 years. With Northern Rock becoming nationalised and many other banks forced to be bailed out by the taxpayer, this was just one of a series of emergency cuts designed to save the country falling further into an economic meltdown.

Will This Finally be the Year?
Since then, many analysts have been predicting that rates would soon be on the rise again. While the forecasts have proven to be wrong every time, some independent economists are now saying that 2016, finally, will see the first increases. Many believe that the recent decision by the US Federal Reserve to raise interest rates for the first time since the summer of 2006 has opened the door for Bank of England to follow suit. This is expected to come in two separate increments, each by 0.25%.

Lenders Cut Rates to Entice Buyers
Mortgage borrowers benefited from record lows as price wars between the big lenders took off. So far this year we seen a continuation of this trend, with a flurry of rate cuts and extra incentives to try and lure in first-time buyers and those remortgaging. While it's good news for borrowers that the low pricing has continued, it’s always important that you look beyond headline rates and also consider all the extra variables that can affect the overall cost of a mortgage. Saffron Building Society currently advertise no arrangement fee and a cashback sum of £800, which could prove a better than other deals.

How Will This Impact Mortgage Borrowers?
One thing that you will certainly have to account for is the stamp duty increase in England and Wales that is to go into effect next April. Similar changes are also expected north of the border in Scotland and this will affect anyone buying a home that is not their main residence. That will make things more expensive for second-home buyers and buy-to-let landlords, and may deter some potential buyers altogether. The Council of Mortgage Lenders believes that the number of new loans made to landlords will now fall sharply, from 116,000 in 2015 to just 90,000 in 2017.

Many analysts are also predicting that this could cause some buyers to rush through buy-to-let property purchases before the higher stamp duty rates take effect on March 31. For anyone who finds themselves in this position, it’s important that they don’t rush into risky buys that could cause them problems further along the road.