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The decision by the Bank of England to pause increases in the base rate has brought relief to borrowers in recent weeks.
Lenders have responded with some quite dramatic reductions in interest rates across all fixed rate terms.
This has been driven by the expectation that interest rates will fall in the next 2 to 5 years.
Although the press believe interest rates will fall in the next 12 months only time will tell as it is dependent on so many factors
To place the interest rate reductions in context we can compare purchase interest rates in October to now.
In October 2023
A 2 year fixed rate with a deposit of 20% the interest rate would have been 6.32% with a £495 fee and £1000 cash back
A 5 year fixed rate with a deposit of 20% the interest rate would have been 5.04% with a £999 fee
In December 2023
A 2 year fixed rate with a deposit of 20% the interest rate is 5.15% with a £899 product fee with an overall APRC of 8.4%
A 5 year fixed rate with a deposit of 20% the interest rate is 4.67% with a £999 product fee, £100 survey fee and an overall APRC of 7.45%
Source of product data Trigold, recent data @ 4th December 2023
The suitability of any mortgage is dependent on your credit status and financial circumstances and not all borrowers would qualify for the products quoted.
The expectation is that interest rates will continue to fall in the coming months and that lenders will rotate in offering the lowest rates.
With ever changing interest rates and differing lenders offering the lowest cost product from week to week demonstrates the importance of receiving up to date independent advice.
By doing so, this will ensure borrowers are receiving the most competitive deal available. It is also important for borrowers to continue to review the chosen products prior to completion to ensure it remains the most competitive.
An independent mortgage adviser is in the best possible position to advise you.
APR Money Ltd are our recommended independent mortgage brokers, they do not charge a fee, and will assist you to research the whole of market and discuss the range of options available.
Book your free, no obligation consultation with our partners APR Money Ltd here: https://www.aprmoney.co.uk/book-consultation/
A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Date Posted
December 12, 2023
Article Category
Author
Lucy West
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