What’s happening with Mortgage Rates
Following a turbulent few years for the mortgage market, we take a look at what’s happening with Mortgage Rates right now. Our Managing Director Adam Nanson has worked in the mortgage industry for over 20 year gives his expert opinion.
What’s happening with the Bank of England Base Rate?
“The Bank of England reduced the Base Rate for the second time this year. Inflation went below the target of 2% in September, so it was
widely anticipated that the Monetary Policy Committee would vote to lower the Base Rate. Which means the Base Rate now stands at 4.75%.
“The Base Rate is important because it influences the rates that lenders charge for loans and mortgage loans. This is welcome news for anyone with a mortgage but less good news for savers.
“On 19th December, the MPC will meet again to decide what is happening with the Base Rate. There are some concerns that inflation might be higher than expected over the next year. Which means that the next Base Rate decision will be less clear cut*.”
What is happening with Swap Rates right now?
“A mortgage swap rate is the interest rate lenders pay to financial institutions to secure fixed funding for a set period of time. Swap rates are important for determining mortgage rates.
“You would think that, with the Base Rate dropping, that swap rates would go down. However, we saw swap rates go up immediately after the Autumn Budget.
“This means that some mortgage rates have been creeping up over the last few weeks**.
What does this all mean for my mortgage?
“The positive news for homeowners is that mortgage rates are still lower now than they were a year ago. And, there are more mortgage products available***. Which means, if you are looking to fix your rate, you’re probably in a better position now than in 2023.
“However, there is ongoing volatility with regards to rates. Added to that, some lenders have changed the mortgage window for switching to a new deal. Typically, it has been six months in order to lock in a new deal when staying with your current lender. Some lenders are now changing this window to four months or even three months****.
“All this means that it is more important than ever to speak to a mortgage broker in order to review your mortgage options. An experienced mortgage broker will stay on top of interest rates and can search deals from across the market to save you money.
“Your Mortgage Broker will regularly review your rate within your six months switching window. This is essential with mortgage rates ticking up and down. The sooner you lock in a new rate the better as your broker can then do a rate review as many times as you need until around a month before your deal comes to an end (depending on the lender).
“The transfer window remains at six months when switching to a new lender. So one option is to opt for a remortgage with a new lender while you wait to see what your current lender is willing to offer you. But don’t miss out on a rate with a new lender while you wait to see what your current lender will offer you as rates could tick up again in the meantime leaving you in a worse position.”
Your Mortgage Expert is not like other mortgage brokers. Our expert, friendly team has over 80 years of experience in the mortgage and protection industry. We’ve over 100 five star reviews on Google and over 90 verified reviews on VouchedFor. And we would love to work hard for you.
We don’t charge anything up front, so by speaking to our mortgage advisers, you are under no obligation. We are based in Salisbury, Wiltshire, but we can help you no matter where you live in the UK.
To speak to us about what is happening with Mortgage Rates right now 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.
*Source: https://moneyfactscompare.co.uk/news/banking/bank-of-england-base-rate-november-2024
** Source: https://www.independent.co.uk/news/uk/home-news/interest-base-rate-cut-bank-of-england-b2643243.html
*** Source: https://moneyweek.com/investments/property/why-lenders-hiking-uk-mortgage-rates-interest-rates-explained