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How will interest rates affect you as a saver or a borrower?

Interest rates for savers have been pushed up to their highest level in almost three years whilst the change is almost insignificant to borrowers.

Two-year bonds at banks and building societies paid 1.38% following the rise in base rate from 0.5% to 0.75%, the first move away from the emergency levels of the financial crisis.

By contrast two-year mortgage costs fell for those with small deposits. A borrower with a loan worth 90% of the value of the home benefitted from a tiny fall in the average cost to 2.27%, the lowest rate in five months.

For savers, although these changes are really only reflected for those that are prepared to put their money away for a long time, there are a lot of different products out there to look at.

We would advise speaking to a financial advisor or checking across comparison sites before making any decisions about where to save for the future.

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