Analysing Google Trend for mortgages

Analysis Google Trends: Mortgages

We take a detailed look at trending topics on Google to find out what the wider market sentiment is regarding mortgages and interest rates. We also provide up-to-date information based on Mortgage Interest Rates, Swap Rates, The Base Rate and more. Keep reading for a more in-depth understanding of the mortgage marketplace.

This chart displays the Bank of England’s base rate, which is the rate at which commercial banks can borrow from the central bank. It also shows the 5-year and 2-year fixed-rates available for New Homebuyers via Nationwide Building Society during the period.The base rate influences the fixed rates. as lenders use it as a benchmark for setting their own rates. When the base rate goes up., the fixed rates also tend to increase, and vice versa. The chart helps you visualise how these rates have changed over time and how they relate to each other.

This chart shows the monthly mortgage repayments for a 5-year fixed-rate and a 2-year fixed-rate mortgage, based on a loan amount of £200,000 over 25 years. The repayment amount is calculated based on the interest rate against the loan term, and includes both the principle and the interest. As you can see, the repayment amounts have increased and decreased along with the mortgage interest rates from the previous chart.

This chart displays the Consumer Price Index (CPI) inflation rate and the SONIA (Sterling Overnight Index Average) swap rate. CPI is a measure of the average price change of a basket of goods and services over time and used as an indication of the cost of living. The swap rate is the rate at which two parties exchange fixed and floating interest rate payments. The chart shows how inflation and swap rates have fluctuated over time and how they may affect the economy and financial markets. A high inflation rate may lead to higher interest rates, as the central bank may try to control inflation by raising the base rate (as you can see in first chart. The swap rate can be affected by various factors, such as market expectations and liquidity conditions. Understanding these rates can help you make informed decisions about investments and financial planning.

Search Trends

Analysing trending topics on Google is an interesting, yet speculative way to assess the general market sentiment.

As expert mortgage brokers we are always keen to find out what our clients concerns are, and whether the wider market mirrors what we hear on a day-to-day basis.

Of-course, there are a myriad of factors which affect the UK’s mortgage marketplace, and we’d just like to point out that Google trends are a lagging indicator.

What’s a lagging indicator I hear you ask? A lagging indicator shows you an outcome after the fact.

Example: Mortgage Interest rates are in the news as lenders begin to put their rates up. After a brief delay, you may see the search term “mortgage interest rates” start to climb in the rankings.

The more people who search google for “mortgage interest rates” the higher the search term will climb in their search rankings, pointing towards a growing concern in the wider marketplace.

What mortgage searches are rising?

5 year Fixed-rate mortgages

Increasing searches for 5 year fixed-rate mortgages
Google Trends: 5 Year Fixed-rate mortgages

Given the fact that mortgage interest rates are rising, it’s no surprise to see an increasing interest in longer term fixed-rate products.

Typically, 5 year fixed-rate mortgages come with a higher interest rate than 2 year fixed-rate products. This is because the longer a lender fixes your interest rate, the higher the risk that interest rates could move up and leave them out of pocket.

So, when we see more clients choosing to pay higher monthly repayments for better long-term security, it could be concluded that borrower’s attitude towards risk is beginning to change.

The graph below shows the interest in variable rate mortgages over time. It’s no surprise that searches for variable rate mortgages have never recovered from it’s all time high in 2008 when the housing market crashed, interest rates flew up and many homeowners were forced to hand their keys back.

Variable rate mortgages - prospect Tree Mortgages
Google Trends: Variable rate mortgages

We can see that searches for variable-rate mortgages increased briefly in 2020 during the on-set of the pandemic. Although, since then searches for this type of mortgage have reduced back to their pre-pandemic levels.

Interest rates

The google search results for “mortgage interest rates” is also steadily increasing. Once again, fear was at an all-time-high after the housing market crash in 2008 so that is when Google registered the most searches for this topic.

Whilst we aren’t there yet, if the trend continues in its current direction, we will soon see the highest number of searches for this topic since 2017.

Interest Rates and Mortgages 2022
Google Trends: Mortgage interest rates

How much is my house worth?

Lastly, we look at the search term ‘how much is my house worth?’ and this one is very interesting. Google hit an all time high for this search term in January 2022 and it seems as though we are about to reach those highs again in May 2022.

How much is my house worth, mortgage, remortgage
Google Trends: How much is my house worth?

We find this search particularly interesting as the UK housing market supply isn’t currently meeting the huge demand for properties. Yet UK homeowners are clearly becoming increasingly interested in what their properties are worth. Despite this increasing interest, searches for Estate Agents remains the same (below).

Estate agents - mortgages, remortgages
Google Trends: Estate Agents
Remortgages are increasing - Prospect Tree Mortgages
Google Trends: Remortgage

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