Implications of a potential rate raise on affordability at ZOPA, which is a Fund I investment.
After more than a decade the Bank of England has raised interest rates. They’ve only ticked up by 0.25%, but it’s a shift in direction and the first time we’ve seen this for a while. A higher interest rate environment isn’t something new for Zopa. When we made our first loan in 2005, interest rates were at 4.75%. And in our first five years, the Bank of England base rate varied from 5.75% to 0.5%. So, while it seems like a big change its actually quite modest – and we’re very used to lending in higher interest rate times. So what will the rate rise mean for people’s finances? Firstly, if you have any variable debt, like a tracker mortgage, then that will become slightly more expensive.