Over the course of the past few months there has been much rejoicing by all those individuals who have a homeowner loan on their property, particularly those who took out a tracker rate, as interest rates have dropped significantly since October last year, to the lowest levels in the history of the Bank of England, saving many borrowers hundreds of pounds each month on their homeowner loan repayments.

And despite the fact that rates have already reduced by 3.5 per cent, there is still a large amount of speculation and expectation from experts that interest rates are likely to fall even further over the coming months.

Many borrowers are now enjoying the fact that they have an increased level of disposable income each month, due to their reduced loan repayments, but there is a word of warning to be noted before all these individuals get carried away with their apparently new found wealth.

Although interest rates have dropped to an all time low level, with the possibility of even more reductions, this will not last forever and there is no doubt that interest rates will increase again at some point in the future.

Those people who are now saving money on their homeowner loans should be careful not to use those monthly savings to take out any new personal loans or other credit commitments, as they won’t have the money to be able to afford these repayments once their mortgage or homeowner loan payments go back to where they were previously.

A far more sensible idea is to focus on repaying any existing outstanding personal loans or credit card balances with the spare cash, or overpay on their mortgage if they don’t have any other debts. This will leave borrowers in a much stronger financial position to be able to cope when interest rates do eventually go up again.