Since March of last year the base interest rate in the UK has been at an all time low of just 0.5 percent, which is the lowest it has ever been in the history of the Bank of England, which spans over three hundred years. However, with inflation getting out of hand it is highly likely that at some point in the near future the Monetary Policy Committee will have to consider increasing the base borrowing rate.

Whilst nobody has a firm idea of when any base rate increase may take place there has been speculation over how quickly and rapidly the rate may rise. Some believe that the rate will be increased this year in order to keep a lid on inflation, whereas others believe that it is more likely to be early of mid-2011 before any rate rises are implemented due to the continued fragile state of the economy.

One industry official has suggested that the base rate could increase surprisingly rapidly over the next couple of years, going as far as to say that the base rate could leap from its rock bottom level of 0.5 percent to as high as 8 percent within the next couple of years.

For homeowners with mortgages this could spell really bad news, as it could mean mortgage rates rising to 11 or 12 percent, which could add hundreds of pounds a month to the average mortgage. With some people still suffering financial problems because of the recent recession and job losses this could have a really negative impact, and could leave many people unable to afford their repayments, which could lead to rising repossession numbers.

With this in mind it may be worth homeowners looking at their options when it comes to their mortgages. Whilst nobody should rush into taking drastic action as a result of the rumours and speculation it is always advisable to have a good idea of the options available so that you can be prepared for when the base rate does start to increase.

For many the choice of a fixed rate mortgage may be a tempting one to protect them from huge increases in interest rates, but before making any changes or committing to any particular mortgage deal it is well worth seeking advice from a professional and experienced independent financial advisor to ensure that you get the best deal.