Mortgage Calculator: Find The Right Payment Plan & Interest Rates"
UK interest rates
As the Bank of England struggles to retain control of inflation, currently well above the 2% long-term target, there has been a significant increase in base rates. If we look back to December 2021, the UK base rate stood at a historic low of 0.1%, and today, it stands at more than 5%, but there are signs that recent interest rate rises are starting to bite, prompting downward pressure on inflation (BBC Business). While relatively high inflation is still placing pressure on business and household budgets, it’s essential to put this into context: the average base rate over the last 50 years was just over 7% (Trading Economics).
The mortgage Market
The mortgage market has been susceptible to base rate speculation, although as we approach the peak, uncertainty is starting to give way to more short-term visibility. As the upward pressure on interest rates begins to diminish, this has encouraged lenders to return to the market with competitive mortgage deals. This comes at a time when the UK housing market is starting to show signs of a slowdown, in line with the recent economic forecasts which suggest the UK will underperform counterparts in Europe, the US and further afield (IMF).
While inflation has come down from a double-digit high, a recent upsurge in the price of oil and gas, together with strong wage inflation, would indicate that the battle is not yet over. It appears that the Bank of England is also willing to sacrifice short-term economic performance, if required, to head-off any resurgence in inflation, creating firmer financial foundations for the future. As attention turns to the short to medium-term outlook, it does look as though interest rates will remain relatively high for at least the next two years.
Mortgage Interest rate calculator and monthly payments
These figures are only illustrative. An assessment of your needs will be confirmed before a recommendation can be made. A Key Facts Illustration, which is personal to your circumstances, will be provided if a recommendation for a mortgage product is made.
Obtaining the most suitable interest rates with Taylor-Brown
As UK inflation continues to remain well above the BoE’s target of 2%, it is likely we will see interest rates hovering above 5% for the medium term. Whether or not rates have peaked remains to be seen but a recent fall in inflation, to 4.6% in October, is certainly encouraging (Reuters).
My clients often look for certainty in what has become a very uncertain world – therefore, many still gravitate towards fixing their mortgages, especially with 5+ year fixed rates currently lower than most short-term arrangements.
As valued customers, I would not only secure a mortgage offer for you but would also review the rates throughout your purchase/6-month remortgage window. The aim is to secure the initial mortgage rate if rates start to move higher during the purchase/re-mortgage process or look to negotiate improved terms if rates move downwards, always looking to act in the client’s best interests.
Current Mortgage Interest Rates UK
The Office for National Statistics today confirmed that inflation in November fell to 3.9% from 4.6% in October. The fall was greater than analysts had been expecting, prompting yet more speculation that the Bank of England could start to reduce the UK base rate in early 2024. Any reduction would lead to a softening in mortgage rates.
Today’s Bank of England announcement that base rates remain unchanged was no surprise. This follows recent confirmation that the UK economy contracted by 0.3% in October, leading some analysts to suggest base rates could start to fall in early 2024.
Earlier today the Bank of England announced rates to remain unchanged – this is after a year of raises, from the December 2022 decision to raise to 3.5% to the successive increases that have occured during 2023 to the November rate of 5.25% This is the UK base rate that mortgage companies can provide tracker, fixed or variable rates for UK Mortgages.
The Spring Budget for the UK was primarily about fuel taxes, the cost of living and attempts to bring inflation under control. It is this that resulted in another interest rate change for the UK.
Understandably, many clients are gravitating towards fixed rate mortgages to give them a degree of security and the ability to budget with an element of confidence. As a consequence of the short to medium-term prospects for interest rates, five-year fixed-rate mortgage deals are currently lower than their two-year counterparts. However, the longer the fixed term, the greater the level of uncertainty compared to future interest rate movements. For example, a competitive 5-year rate today may look expensive in 12 months, if the UK moved into recession, and the Bank of England would be forced to reduce the base rate.
As an established mortgage broker, we provide advice and guidance every step of the way. We would not just secure them a mortgage offer and forget about them – we pledge to keep our finger on the pulse throughout the purchase/6-month re-mortgage window. We review rate changes, looking to take advantage and secure the appropriate deals if rates rise or fall during the purchase process, whether this is at the time of first getting in touch with us or when your current deal is expiring.
Over the years, our knowledge and experience, along with the many contacts we now have in the mortgage market put us in an ideal position to help us find the most appropriate lenders to approach for your solution. Being in the intermediary market we may be able to secure you deals you might not have access to which may mean more favourable preferential rates or fees.
Disclaimers:
a. All the information in this article is correct as of the publish date 20th November 2023. The opinions expressed in this publication are those of the authors. The information provided in this article, including text, graphics and images does not, and is not intended to, substitute advice; instead, all information, content and materials available in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.
b. Your home may be repossessed if you do not keep up repayments on your mortgage.
c. There may be a fee for mortgage advice. The precise amount will depend upon your circumstances.
