In a confirmation of what we at Oportfolio have been saying for a while now, another mortgage expert from property website Rightmove has announced that he believes that fixed UK mortgage rates will almost certainly go down. And we could see these rate reductions taking significant effect over the next few weeks, despite the base rate rising.
The Base Rate
It seems a bit like deja vu every time we mention the base rate, but it really is an important topic to keep talking to our clients about. If you want to know more about what the base rate is and how it relates specifically to mortgages, you can read our previous blog. The most important thing to know is that the bank of England has raised it’s base rate, and every other time that it has done this over the last 12-months, mortgage lenders have increased their interest rates. So understandably a lot of existing borrowers and potential new mortgage customers expected interest rates to go up again. However, this has not been the case.
Since the new interest rate of 4.25% was announced on the 23rd of March, mortgage interest rates have more or less stayed the same with some lenders reducing their rates and industry experts are actively and confidently predicting that rates will drop even more very soon.
What Do Rightmove Predict?
Reported in Marc Shoffman’s blog for estateagenttoday.com, Rightmove’s mortgage expert Matt Smith said “Mortgage lenders had already factored in a Bank rate rise in March. The fact that it was lower than the previous rise in February, along with the longer-term indication that inflation is still likely to fall sharply over the year, is giving lenders more confidence to start to edge down their rates.
We’ve seen reductions of up to 0.05% in average mortgage rates compared to this time last week, as lenders begin to respond to the Bank of England’s decision. Prices have reduced across all loan-to-value ranges, for both two and five year fixed deals. A number of lenders have been quick out of the blocks to change their prices, but with more likely to follow suit in the coming days, we should expect to see further reductions in the coming week.”
This comes after an in-depth analysis of rate trends carried out by Rightmove over the last few months which identified that fixed UK mortgage rates have actually reduced by 0.05% on average since last week when the new base rate was revealed. Of course this means that fixed mortgage products are cheaper than they have been over the last 4 months or so, and are likely to come down. However, people on tracker mortgages which track the base rate or are on the lender’s standard variable rate are almost certainly going to be paying more per month as these rates are directly impacted by the base rate.
Shoffman’s article also provides some current average mortgage product rates to compare how they shape up compared to before the latest base rate rise and 12-months ago. As we can clearly see, there is a drastic change since last year. But, rates are definitely coming down, albeit slowly.
Speak To A Mortgage Advisor About Mortgage Rate Decreases
Whether you are near your fixed rate coming to an end, or are currently on a variable rate or tracker loan already, we at Oportfolio mortgages are here to help and offer guidance and advice. Give our team of friendly mortgage advisors a call today for a free mortgage assessment and initial consultation.