So, the Bank of England has held the base rate at 5.25 per cent – again. As a Maidenhead mortgage broker, we find this very reassuring in as much as it suggests that the economy is stabilising.
But what does it mean for those applying for a mortgage? Will mortgage rates go up or down as a result? And what can homeowners (existing and prospective) expect from the mortgage market over the coming months.
What’s happening with mortgage rates right now?
Well, let’s start with the fact that those looking to get the best mortgage deal can now access fixed rate mortgages at less than 4 per cent.
Given where we were not that long ago, when mortgage rates were almost at 7 per cent, this is a marked improvement (although it’s worth pointing out that rates of 4 per cent and below are typically available to those requiring 60 per cent loan-to-value mortgages and, in some cases, those who have premium banking facilities).
Of course, this is still a long way from the 1 per cent and 2 per cent rates we as a nation had grown used to – but we’re not going to see those rates again for a very long time.
It’s also worth pointing out that even though the base rate has stopped moving up or down (for the time being at least), it doesn’t necessarily mean that mortgages will follow suit. In fact, since the beginning of the year, lenders have been in fierce competition, cutting mortgage rates on what felt like a daily basis – even though the base rate hasn’t moved. So why, exactly, is this?
Our team of Maidenhead mortgage advisersbelieve that the reason mortgage rates are continuing to decrease despite the base rate flatlining is due to experts’ predictions that the base rate will begin to fall towards the middle of the year.
Getting the best mortgage deal
The logical question, therefore, is if the base rate starts to go down, will mortgage rates continue to go down, too?
If you’re on a tracker mortgage, then then the answer’s ‘yes’. As soon as the base rate moves up or down, so too does your mortgage rate. But when it comes to fixed rate mortgages, there’s more at play – as our article on swap ratesexplains.
As a mortgage broker in Maidenhead that’s weathered a few economic storms since we opened our doors in 2005, we’ve seen enough over the last 12 months to make what we feel is an informed opinion, which is that we feel that fixed rate mortgages will get to around 4.5 – 5 per cent and stay there for some time before falling in 2025.
On that basis, waiting for rates to fall further may not be advantageous – particularly if property prices start to climb again.
However, if it’s all a bit confusing – and if that’s the case, then you’re not alone – then our advice is to get in touch with one of our Berkshire mortgage brokers, who will not only be able to offer you a clear picture of the mortgage market, but also guide you through it based on your own personal circumstances.
Thinking about your next move? Looking for mortgage advice? If so, contact our team of Maidenhead mortgage advisers on 01628 560820 or by emailing enquiries@altonmortgages.co.uk.