Rates unchanged at 5.25%. Green shoots appearing?

rates unchanged at 5.25%

Bank of England announcement, rates unchanged at 5.25%

Following on from recent inflation figures The Bank of England have voted 6 – 3 to leave rates unchanged at 5.25%. This can only be viewed as good news and hopefully indicates that cuts may be closer than originally predicted.

Fixed rate mortgages are priced in line with the Sonia swap rate and this has been decreasing recently, at the time of writing the 2 & 5 year rate are 0.32% & 0.27% lower than a month ago.

If you combine lower interest rates with lower house prices then buying a home is certainly at it’s most affordable for a while. If things carry on in the same direction we should see rates below 5% for most borrowers. At this moment in time the best 5 year fix for a loan to value of 60% is 4.64% and at 90% loan to value it is 5.11%. 2 year rates start from 5.10% but we are hopeful these start to dip below 5% in the near future.

What does this for people wanting to buy for the first time or move house?

The combination of mortgage rates starting to ease in the short term and house prices at a more reasonable level should start to unlock a difficult housing market. People ultimately need to move for various reasons but have been put off during a time that has been very uncertain, we are seeing some confidence returning to the market and todays interest announcement should cement this further.

If you have been delaying that move or purchase then it may be worth a call to see how the land lies, you may be surprised.

What effect will this have on my current mortgage when my current deal finishes?

If you are soon to be coming off a fixed deal then there’s no denying that your monthly payments are likely to be higher. On a positive note we hope to see rates relaxing in the coming months so the increase may not be as bad as you were expecting.

If your mortgage product is within six months of ending you can secure another now. Having secured a new product you can feel comfortable that you have something lined up. If interest rates are cheaper when your existing product comes to an end we can compare what you have secured now with what’s available at the time and see which is cheaper.

What does this mean for the mortgage market?

This is a big step in the right direction as the rates unchanged at 5.25%. It doesn’t mean we are going to see a big impact on interest rates immediately but we are already seeing movements downwards in the markets lenders secure their rates from. If inflation continues it’s general downward trend then hopefully things will ease over the coming weeks and months.

How can we help?

As independent Brokers we have real time access to rates as they change. If you just want a quick conversation about what your mortgage may look like in the future or you’ve been putting off moving then we will be happy to help you make an informed decision.

The first step is a conversation with one of our experts.

If you’d like to learn more about mortgage products and how we can help you, please don’t hesitate to get in touch with our team. We’re here to help you navigate the ever-evolving world of mortgages and guide you toward a brighter, greener home.

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