Since 2022, mortgage rates increased at a record pace, with the 10-year fixed mortgage rate doubling between March 2022 and December 2022. With inflation increasing, the Bank of England introduced several bank rate rises, resulting in higher mortgage rates.
Thankfully for homeowners, mortgage rates are finally starting to fall. The lowest fixed deals are back below 4%, and some two-year and five-year fixed rate products are approaching a similar rate despite the Bank of England holding the base rate at 5% last month.
Although the Bank’s lending rate does not automatically affect mortgage rates, inter-bank ‘swap rates’ demonstrate the market’s view on interest rates over the long term are set to fall, with the current five-year fixes being lower than the two-year rates.
Most industry analysts also feel that fixed rates will reduce further in the coming months, giving those considering moving home or remortgaging more confidence about their financial options.
Here at The Financial Planning Group, we monitor rates daily and can switch our clients to lower rates if a mortgage offer has been issued but has not gone live. We also work with our clients on the best medium-to-long-term strategy when a fixed-rate deal is coming to an end to provide flexibility and freedom to renegotiate when the time is right.
If you or a friend or family member have a mortgage or remortgage situation on the horizon and would like to talk through your options, please contact Steve Padgham via e-mail at Steve.Padgham@fpgonline.co.uk or by calling 020 8614 4782 and he’ll be delighted to help you.
