Are Mortgage Interest Rates Going Down?

Are Mortgage Interest Rates Going Down?
Home Blog Are Mortgage Interest Rates Going Down?
George Sweeney

Author: George Sweeney

Content Writer

Updated: March 15, 2024

Trying to figure out whether UK mortgage rates will go up or down can sometimes feel like a guessing game. There are moments when people discuss the movement of rates with an air of certainty. But the truth is, it can be hard to predict what will happen, and sometimes mortgage rates are more complex when you look under the surface.

Current status of UK mortgage interest rates

With the Bank of England (BoE) base rate rising to combat inflation, mortgage interest rates have mostly been moving in line with these increases over the last year.

However, it’s important to realise that sometimes lenders will develop their own strategies and tactics about how to place mortgage products in the market. So, a rising base rate doesn’t always mean higher mortgage rates and vice versa.

Right now, it’s possible to secure a mortgage with rates of between 4% and 6%. Of course, the rate you’re able to get will depend on:

  • Your personal circumstances (credit history, income, size of deposit etc.)
  • The type of mortgage you need.
  • The lender you approach.

Are mortgage interest rates going down?

Some are. It’s a situation that’s confusing borrowers because the BoE is still periodically raising the base rate.

So, why are mortgage interest rates going down? Well, rising interest rates can lead to lower house prices, so borrowers can only afford a smaller mortgage. To counter a drop in demand, some lenders are offering good interest rate deals to encourage buyers to take out a mortgage.

This has led to a slightly improved selection of fixed-rate mortgage deals coming onto the market recently. With the relative uncertainty, decent discounted variable rate deals are also available, but you risk moving onto an expensive rate later if rates do rise.

Certain lenders wanted to get ahead of the curve and offer lower rates to encourage customers to borrow (even though the base rate is still increasing). Although, it appears certain deals are beginning to be pulled.

What the experts are saying

These lower rates and deals may have been lenders jumping the gun. The UK’s largest mortgage lender Lloyds Banking Group recently said that 200,000 customers were in for a ‘mortgage shock’ by the end of 2023.

However, this ‘mortgage shock’ mostly refers to customers coming out of fixed-rate deals that were locked in a few years ago. In reality, some of the rates available today are actually better than we’ve seen in previous months.

What does the future hold?

The truth is, no one knows – not even the most experienced mortgage experts. You can look at what’s happened in the past to get an idea, but today’s situation is unique.

It’s impossible to predict what will happen with mortgage rates. If someone tells you they know for sure, take the advice with a pinch of salt.

There will be lenders still offering competitive mortgage rates. But the deals may become harder to find.

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