After a few turbulent months, in which mortgage rates have seemingly been rising in line with the Bank of England’s (BoE) base rate, the scales seem to be tipping as mortgage rates begin to fall.
A number of fixed rate mortgage rates have now dropped below the five per cent mark for the first time in two months – a move that will no doubt be reassuring for those looking to apply for a fixed rate mortgage or remortgage.
As a Maidenhead mortgage broker, we’ve been inundated with homeowners who, after enjoying comparatively low fixed rate mortgage deals for many years, have now found themselves looking at mortgage deals that are, in some cases, double what they were paying.
What about the base rate?
The UK’s inflation issue hasn’t gone away, despite the several interest rate rises made by the BoE over recent months.
Against this backdrop, then, will fixed rate mortgages rise again if the BoE continues to raise the base rate? If so, is now – as in right now – the window of opportunity to get a sub-five per cent fixed rate mortgage?
Our team of Berkshire mortgage advisers believes that the answer is ‘no’. In fact, we believe that fixed rate mortgage rates will continue to decrease. And here’s why.
Already priced in
Let’s go back to almost a year ago, when then Prime Minister Liz Truss and former Chancellor of the Exchequer, Kwasi Kwarteng, announced a series of measures that marked the beginning of instability within the mortgage market.
Even then, lenders priced in mortgage rate hikes that covered themselves in the event of several base rate hikes – something that ultimately happened.
Now, with experts predicting that there is likely to only be one or two further base rate rises, the mortgage market seems to be stabilising, which is great news for homeowners.
And, as fixed rate mortgages were already priced accordingly, we think that any fixed rate movement is likely to be downwards in nature.
Should I wait to get a fixed rate mortgage?
The logical next question, therefore, is shall I wait for rates to get even lower before applying for a fixed rate mortgage?
The answer depends on what’s best for you right now. For example, if you know you want to fix and your existing deal is coming to an end, then you may not have the choice of waiting. Equally, maybe your personal circumstances are about to change and committing to something as long-term as a fixed rate mortgage isn’t right for you.
For some, sitting and waiting for rates to fall even further may be a sensible option. For others, that almost certainly won’t be the case. Our team of mortgage brokers in Maidenhead will be able to quickly and easily establish the best approach for you, so get in touch.
If you’re asking ‘what’s the best mortgage for me?’, then it’s probably time to speak with a Berkshire mortgage broker. Contact our team of Maidenhead mortgage advisers on 01628 560820 or email enquiries@altonmortgages.co.uk.