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Which way forward for interest rates?


The New Year started very positively with what seemed like serious competition between lenders, lowering interest rates, which was a welcome relief to borrowers.

However, interest rates have increased in recent weeks due to inflation data, although geopolitical events certainly haven’t helped.

Whilst economic data at home and abroad can have a major impact on interest rates there are other factors that influence the pricing of mortgage products.

Lenders still have targets to retain existing clients and attract new clients, which has helped to keep interest rate rises to the absolute minimum during this uncertain first quarter of 2024.

Towards the end of 2023 it was widely expected that interest rates would begin to come down by summer 2024.

The Bank of England anticipated inflation would reduce more quickly than we have experienced, which has been due to a variety of economic and political factors.

At the time of writing we can only speculate at to when the Bank of England are likely to make the first reduction in the base rate and it is likely that rates will be higher for longer than initially expected.

However, more recently a number of lenders have surprised the market by making selective interest rate reductions in different market sectors.

For example some lenders have reduced interest rates for purchases, whilst others have made changes to their re-mortgage, or first time buyer products.

What next?

To predict the way forward for interest rates is very challenging.

While further interest rate hikes seem unlikely, the ongoing inflation concerns and global issues make significant rate reductions in the near term unlikely.

However, there are over 80 lenders in  the mortgage market and recent evidence would suggest that the mainstream lenders are willing to offer market leading interest rates for short periods of time regardless of the short term economic backdrop.

To ensure that you are able to take advantage of these opportunities an independent, fee-free mortgage adviser is best placed to assist you. They will search the market to secure the lowest cost of borrowing for your particular needs and circumstances.

APR Money Ltd can provide advice across the whole of the mortgage market and a thorough review of the lending options for clients, to secure the most cost effective and appropriate product for your needs.

Book a no obligation appointment here and someone will be in touch ASAP.

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.


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Date Posted

April 8, 2024

Article Category


Lucy West

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