Mortgage rates have been rising for some time now, and many homeowners are concerned about when they might start to fall. If your fixed-rate deal is ending or you're on a tracker or SVR mortgage, you'll be eagerly anticipating when you might benefit from lower rates.
As a result, some mortgage lenders have started to trim the cost of their mortgage products. It's a sign that the market is beginning to turn, but it's still too early to say whether mortgage rates will continue to fall.
With inflation falling and savings rates now beating inflation, the pressure is on for mortgage rates to fall. However, there are still many factors at play. This article will look at the key reasons why interest rates are higher and when we might see them start to come down.
When Will Mortgage Rates Go Down UK
The Bank of England has already pushed interest rates up fourteen times in the past three years. This has been done in an effort to slow rising inflation, and it has had a significant impact on mortgage rates. The average two-year fixed mortgage rate currently stands at 5.59%, although this has fallen from its recent peak of 6.86%.
This has led to many borrowers remortgaging to save money or get a better deal. It has also encouraged new buyers, particularly those looking for a first home. In fact, mortgage approvals hit a record high in November, bucking expectations that the market would continue to slide.
Despite these positive signs, it's likely that interest rates will remain fairly high for some time to come. The Bank of England is unlikely to cut interest rates until evidence is seen that the economy is recovering, and that's probably not going to happen any time soon.
The good news is that the cost of a mortgage will be much lower than it was a year ago, thanks to the bigger-than-expected drop in inflation. However, it's likely that we won't see mortgage rates below 4% until 2024 at the earliest.
HSBC has become the first major lender to cut its mortgage rates below 4%, with one of its five-year fixed-rate mortgages now available at just 4.4%. This could save a homeowner with a £100,000 loan by around £160 a month if they were to switch from their existing mortgage deal.
If you're interested in finding out more about when mortgage rates might go down, you can speak to a qualified advisor for free. Our service connects you with mortgage specialists that can help you find a deal that's perfect for you. Get started by completing our simple form. We'll match you with thoroughly vetted professionals to ensure they meet our strict standards.
You can then arrange a consultation to discuss your options. Alternatively, you can use our mortgage comparison tool to find the best deals. The best rates aren't always advertised, so be sure to do your research.
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