Property buyers who will need to look for a mortgage soon will be relieved to hear that rates for fixed-rate home loans have begun to fall, after soaring at the end of 2022.
The Money Saving Expert website noted there are “hundreds” of fixed-rate products available for below five per cent, and some are even close to four per cent. This is a significant improvement from September and October last year when rates surged to over six per cent, following the government’s mini-Budget.
“Rates have continued to improve since then, due to competition between lenders and increased political and economic stability,” senior money writer Kit Sproson noted.
Homebuyers could be tempted to lock in a deal, as opposed to opting for a tracker mortgage as this reflects the Bank of England’s base rate. This itself has soared over the last 13 months, increasing from 0.1 per cent in November 2021 to 3.5 per cent in December 2022.
Economic experts predict inflation will continue to increase this year, which means mortgage holders will see their fees rise again.
However, opting for a fixed-rate mortgage provides financial security, as bills will remain the same every month.
Mr Sproson did note those who can wait to fix their mortgage might be prudent to do so, as rates are likely to drop even further over the next few months.
“Some brokers and analysts believe interest rates will continue to edge down in 2023 – possible to as low as four per cent,” he predicted.
If you find the state of the mortgage market confusing, call our mortgage advisors in Liverpool for a better idea on what might happen with products this year.