The Bank of England decided to keep interest rates at 5.25 percent after they went up for nearly two years. This might make mortgage rates in the UK go down even more.
Mortgage rates started going down in the summer because the inflation data was better than expected, and people were waiting to see what the central bank would do.
Experts like David Hollingworth from L&C Mortgages think that fixed mortgage rates will continue to get cheaper. Some lenders, like TSB and Nationwide, cut their rates this week, and a few of them now offer five-year fixed rates below 5 percent, like Nationwide, Virgin Money, and Yorkshire Building Society.
These lower rates are good news for people looking to buy a home or people who already have mortgages that are about to end. Right now, the average cost of a two-year mortgage is 6.58 percent, which is lower than the high of 6.85 percent in August, according to Moneyfacts.
Lenders are trying hard to get people to take out mortgages because the housing market is slow. But if you’re thinking about remortgaging, you might not get the best deals.
Around 800,000 people will finish their fixed-rate mortgages in the second half of this year, and another 1.6 million will do so in 2024. This makes some people worried about their money and how much things cost.
Nick Leeming, who chairs estate agents Jackson-Stops, said he’s relieved that the Bank of England didn’t raise interest rates because it would have been tough for people finishing their fixed-rate deals.
Higher borrowing costs since late 2021 have made house prices go down, and rent for houses has gone up a lot. In August, the rent for private houses went up by 5.5 percent compared to the same time last year, which is the biggest increase in seven years.