BUYIt appears the worst of the recent economic storm is over and more calm, stable conditions are set to prevail. For those who are closely following how the financial markets are affecting mortgage rates, any clouds that linger on the horizon may have a sliver of silver lining.
In early November, the Bank of England’s Governor, Andrew Bailey, stuck his head above the parapet to say that fixed mortgage rates had already peaked – positive news for those who need to press ahead with a purchase this year.
The upbeat message is a result of financial markets overestimating how high the interest rate would climb, with the Bank of England suggesting that its base rate will rest ‘lower than priced into financial markets.’ In layman’s terms, this means mortgage rates were recently reset at inflated levels to accommodate a predicted base rate that might never be achieved.
The Bank of England’s news is already influencing today’s mortgage products for the better. Senior Mortgage Adviser at Capricorn Financial, Tony Chryseliou, commented: “Fixed rates are beginning to come down and over the last week, a number of lenders have repriced their fixed rates, including Barclays, Halifax, Natwest, Nationwide and HSBC.”
“As of today*, 5 lenders are offering fixed rates below 5%, with many others offering deals hovering just above 5%. A few weeks ago, you would struggle to find many options much lower than 5.5%. Borrowers who have been hesitant to buy or have put their search on hold should now review their mortgage options.”
Tony adds that the mortgage market has seen a huge shift from predominantly 5-year fixed deals to shorter fixed deals or even tracker products, without early redemption penalties. “More borrowers are looking ahead to securing a better deal in two years’ time, should rates continue to reduce. It is, however, prudent to bear in mind that further rate reductions are not a guarantee and as we have seen this year, a lot can happen in a short space of time. It’s definitely a great time to review mortgage options and revisit any borrowing advice given recently - buyers may find it’s cheaper to borrow money now, compared to figures given in September and October.”
If you’d like to see how mortgage rates have recently changed for the better, contact Aspire and we can put you in touch with Capricorn Financial.
*21/11/22
