Mortgage lenders drop rates
Over the last few weeks, we have seen many mortgage lenders drop their rates. In our latest article, Adam Nanson from Mortgage Broker Your Mortgage Expert discusses what this means if you’re looking to remortgage this year or buy a new home.
What is happening with mortgage rates
We receive alerts when mortgage lenders drop their rates and, over the last few weeks, my inbox has been constantly inundated with lender updates.
As a result, all the major lenders are now offering mortgage rates of lower than 4%*. And many of the media outlets are dubbing this situation as a mortgage war between the lenders.
As well as rate cuts, we are also seeing some innovation to the market. With some lenders launching products to support New Build customers***. Other lenders are launching products to support Buy to Let clients including refurbishments loans and also mortgage products with greater flexibility for landlords.
Why are rates dropping?
It is anticipated that the Bank of England will lower interest rates this year. Originally, most experts thought the interest rates would be cut twice in 2025. But now many anticipate four cuts throughout 2025 and for us to end the year at a Bank of England Base Rate of 3.5%*8*. This is largely as a result of the turmoil created by Trumps Tariffs.
The MPC met on Wednesday and then announced on Thursday 8th May and as expected lowered rates to 4.25%.
In advance of the anticipation of this, the mortgage swap rates have started to drop and nearly all of the major lenders and many of the smaller lenders have dropped rates*.
Should I apply for a mortgage now or wait for rates to drop further?
Between now and 2027, around 800,000 fixed rate mortgages are set to expire per year. Many of these will be on a rate lower than those currently being offered by lenders*. So despite mortgage rates dropping recently, most home owners will be paying more.
Many people are therefore considering holding off fixing their mortgage deal in the hope that rates go down further.
Whether the Base Rate or Mortgage Rates fall is just a prediction and nothing is certain. Therefore, we advise clients to act based on the market situations now. And hope rates improve.
By locking in a mortgage deal now, you’re protected if rates start to rise for whatever reason. And, as most offers are valid for six months, it gives you time to move to a new deal if mortgage rates do fall.
Once we have secured you a new deal, we will regularly review rates up until your deal expires. And will switch you to a new deal if one becomes available that will save you money.
Should I opt for a tracker?
If your fixed term mortgage deal is coming to an end, the worst thing you can do is to do nothing. If you don’t move to a new deal, your lender will move you onto their SVR which will probably mean you will pay more.
Perhaps you don’t want to fix right now – you might want to consider a Tracker Mortgage or something more flexible.
A Tracker Mortgage is sometimes known as a variable rate mortgage. It usually tracks the Bank of England’s base rate. When rates are high like they are now, if the base rate does peak and then starts to fall, a tracker will allow you to take advantage of falling rates.
A tracker remortgage isn’t for everyone. Much depends on your appetite to risk and what you can afford to absorb in your monthly budget.
We would advise you speak to a mortgage adviser like us to fully review your circumstances and decide what is suited to your situation and budget.
You might find that a fixed rate mortgage is more suitable. With this, you pay the same for the duration of your mortgage term. This brings certainty to the amount you will pay each month, which many people value. Especially with uncertainty around other bills such as gas, electric and food costs.
We can guide you through the process including the pros and cons of Tracker Remortgages. We’ll scour the market for the right deals from multiple lenders, handle the paperwork, and save you valuable time, money, and stress.”
Your Mortgage Expert is not like other mortgage brokers. We’ve over 150 five star reviews on Google and over 100 verified reviews on VouchedFor. We can search 1,000 of mortgage deals from over 90 lenders. We have access to special lenders, exclusive deals as well as your big high street banks. And we would love to work hard for you.
We don’t charge anything up front, so by speaking to us, you are under no obligation. We are based in Salisbury, Wiltshire, but we can help you no matter where you live in the UK.
Simply call us on 01722 322683 or complete a contact us form on our website and tell us when it would be best to get back in touch with you.
YOU MAY HAVE TO PAY AN EARLY REPAYMENT CHARGE TO YOUR EXISTING LENDER IF YOU REMORTGAGE.
A MORTGAGE IS A LOAN SECURED AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.
*Source: https://www.bbc.co.uk/news/articles/cp8kd7mpn1yo
**Source: https://moneyfactscompare.co.uk/mortgages/
***Source : https://www.mpamag.com/uk/news/general/santander-rolls-out-new-mortgages-joins-market-rate-cuts/534214
****Source: https://www.bbc.co.uk/news/business-57764601