What is influencing mortgage rates?
On Wednesday, the ONS reported that inflation had dropped to 3.6%, showing that price increases are slowing and creating optimism that inflation may have peaked.
This means the Bank of England Monetary Policy Committee is more likely to make their sixth cut to the benchmark interest rate in December, expected to reach 3.75%, since August last year. Economists have a broad consensus that interest rates may continue falling into 2026 as inflation continues to cool.
Lenders have responded to this potential interest rate cut by reducing their mortgage rates. With the housing market remaining subdued for several months, partly due to homeowner uncertainty ahead of the Chancellor's Budget decisions on 26 November, lenders are eager to lend and are competing for available business before year-end.
Uncertainty factors remain
Political uncertainty and its impact on financial sentiment and economic confidence could affect this positive outlook for mortgage borrowers.
If financial markets react negatively to Rachel Reeves' budgetary decisions, similar to what happened under Kwasi Kwarteng and Liz Truss in September 2022, mortgage rates could rise sharply.
Additional concerns are emerging in international markets, with the Bank of England Governor warning that recent developments in US private credit markets show troubling similarities to the sub-prime mortgage crisis that triggered the 2008 global financial crash.
Good fortune often happens when opportunity meets with preparation
If your mortgage deal expires in the coming months, it's worth speaking with a mortgage broker now to secure a new arrangement.
Should rates fall further before you complete, you can switch to the lower rate. If rates don't fall, you'll benefit from having secured favourable terms when available.
Mortgage offers typically remain valid for three to six months from new lenders, maintaining their validity unless your financial circumstances change. You're not committed to the offer until you formally accept.
Even if your mortgage isn't expiring soon, early repayment charges usually make early remortgaging expensive, though certain situations might still make it worthwhile. The savings from a new deal could exceed these fees, sudden rate increases might require lower monthly payments, or you might need additional funds for home improvements.
Cleerly Mortgage Brokers
In today's uncertain mortgage market, delaying action can be expensive. While future interest rate movements depend on various economic factors, taking control of your mortgage situation now is essential. Whether you're a first-time buyer looking to enter the property market, planning to move, or need to remortgage, securing early professional advice from a comprehensive market broker like Cleerly is your best approach to avoid being priced out.
We provide clear guidance and confidence, ensuring you secure the most appropriate mortgage for your specific needs. Don't wait for rates to change further; contact Cleerly today to discuss your mortgage options.