Mortgage products are finally reaching interest rates of sub-5%, which is big news for the housing market.
While lenders dropping their rates now is a positive thing for those looking to buy or remortgage, it has the potential to put further pressure on interest rates in the long term. Many analysts, however, are expecting a rise with November’s bank rate announcement, largely due to the higher cost of oil coming into the country.
Regardless, if inflation keeps moving down, borrowers can expect an easing of pressure on their wallets when it comes to fixed rate prices.
Our deputy CEO, Ben Thompson, had this to say on the lender rate drops:
“Many lenders have been steadily reducing their rates, as the wider market expectations of where rates will be in 2024 and beyond have shifted. We are now already seeing rates dip below the 5% mark, in what will be a sigh of relief for borrowers. We have, though, seen swap rates harden again over the last few days” (A swap rate is a rate based on market expectations of future interest rates.).
This round of rate drops has happened fairly quickly, with Rightmove stating1 that the average 5-year fixed rate for a homeowner is 4.66%.
There is light at the end of the tunnel, and it’s something we’ve been saying for a while. Despite previous difficulties in the market, lenders are cutting rates on certain products and there are options available for many homeowners. Whether they’re coming off a deal soon or looking to buy property, positive change is on the horizon. It’s easier to remain optimistic when you look at the bigger picture, which is something we always encourage!
If you’re looking to remortgage or buy a home soon and are concerned about interest rates, get in touch with one of our expert advisers, who can help you work out your affordability and mortgage options.
Sources:
Important information
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