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Mortgage Rates: What to do next?

Posted 10/03/2024 by Robyn Hall
girl on laptop researching

There’s hardly a week goes by lately when there aren’t reports in the press about mortgage rates.

Just last week Chancellor Jeremy Hunt reportedly abandoned plans for a 99% mortgage scheme – where borrowers would need just 1% of the property value as a deposit - due to fears that such a boost for first-time buyers could have pushed property prices higher.

Meanwhile, latest figures from the Office of Budget Responsibility (OBR) suggest that average mortgage interest rates will hit a peak of 4.2% in 2027 - 0.8% lower than the OBR forecast made in November.

While rates are expected to continue to rise, they will do so more slowly, remaining below 4% until 2026, where the previous forecast had anticipated rates hitting this point in 2024.

Whether it’s an attractive teaser rate for new buyers or longer-term fixes for those looking to remortgage there’s a plethora of reasons that lenders will move mortgage rates both upwards and down.

Economic Conditions

Mortgage rates have been on a downward path since the end of last year, although they have begun to edge up in recent weeks as swap rates (the rates at which lenders borrow money) fluctuate and decisions of the next move in Bank of England Base Rate becomes more uncertain. It stands to reason that if interest rates in the broader economy are falling, lenders may adjust their mortgage rates accordingly.

Market Competition

Lenders will often try to attract more customers by offering lower rates compared to their competitors. At the same time, they might also be taking on too much business to handle so they will increase mortgage rates to stem the flow of business and better manage their loan book.

Lower Interest Rates

With lower interest rates, borrowers can normally secure mortgages with lower monthly payments. This can make home ownership more affordable for both existing homeowners looking to refinance and other would-be buyers.

It’s also worth remembering that lower interest rates can result in significant savings over the life of a mortgage. Borrowers may pay less in interest over time, saving money on their overall mortgage costs.


Existing homeowners may have the opportunity to refinance their mortgages at lower rates, potentially reducing their monthly payments or shortening their loan terms.

As for whether consumers need to act now, it depends on their individual circumstances.

For those on higher rates it might be worth exploring remortgaging options if there are lower rates available. But it’s worth taking into account other factors such as how long you intend to stay in your home and whether there may be other costs involved like an Early Repayment Charge.

Rates are Higher

Unfortunately, for those planning to take out a mortgage soon, the majority of the leading mortgage rates are higher than they were this time last week but the situation constantly changes so always speak to an adviser.

According to Moneyfacts the lowest rates for 2, 3 and 5-year fixes all increased significantly from last week.

Rachel Springall, Finance Expert at Moneyfacts, says: “Mortgage interest rates remain volatile, and this may well be the case for the next few weeks.

“However, even if borrowers lock into a rate that’s slightly higher than what may have been available a few weeks ago, borrowers could still get an attractive package by finding a deal that has some cost-saving incentives, a reasonable product fee, or no fee, and maybe even cashback.”

Your initial mortgage appointment is without obligation. We normally charge a fee for our services; however, it is payable only on the submission of your mortgage application. The fee will depend on your circumstances but our standard fee is £549. Complex cases usually attract a higher fee. We will discuss and agree the fee with you prior to submitting any mortgage application.

Please be aware that the information provided within these archives has been pre-published, as of the date published on each article. The information contained within, including references to taxation, legislation, regulation, or any other issues or concerns may no longer apply.

Robyn Hall

UK Property and Finance Expert

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