What Is Happening With Mortgage Rates?

After a somewhat turbulent year of rate increases in both regulated (residential) and non-regulated (Buy-to-Let) mortgage markets, lenders have been trimming rates on their fixed-rate mortgage offerings since July.

While your mortgage interest rate depends on your chosen provider and product, one crucial factor affecting mortgage rates is the Bank of England's base rate. This base rate influences various financial products, including mortgages, savings accounts, and pensions, and it can impact the value of the pound. It's set on the first Thursday of each month, and its determination hinges on UK spending and its effect on inflation. In essence, if spending is too high, the rate goes up, and to stimulate spending, it's lowered.
 
That said, there are other vital elements affecting mortgage rates, such as swap rates on wholesale markets, business levels (in general, if a lender is inundated with new applications, they may temporarily raise their mortgage rates to manage the influx), and the lender's own profit margins.
 
In the past week, lenders like Coventry Building Society, The Mortgage Works, HSBC, and Barclays have all made marginal reductions in their interest rates. Whether this trend will continue is uncertain. We've seen how recent political developments, and the global and national economic landscape can affect market stability.
 
If you're planning to buy a property or your current mortgage rate is expiring in the next six months, it's advisable to consult your broker now to secure the best available rate. At Haverfords, our clients with existing mortgage offers will likely receive news from us about better rates becoming available, including suggestions for product or provider changes when superior options arise. It's essential to ensure that your adviser supports you not only through the mortgage application but all the way to completion, guaranteeing the best mortgage product for your requirements.
 
 Regulatory warning: Your home may be repossessed if you do not keep up with your mortgage repayments.

Kat Chiva DipFA, MLIBF, CeMap, CeRER
Haverfords Director