Take mortgage advice as Bank of England raises interest rates.

Thursday 18 May, 2023

On Thursday 11^th May 2023 the Bank of England raised interest rates from 4.25% to 4.5% to try and lower inflation which was driven higher by rising energy costs and food prices. This represents the 12^th rise in a row, and interest rates are now at their highest level for fifteen years.  However, there was a more positive tone from the Bank’s Governor Andrew Bailey who said the UK is no longer expected to go into recession.  

Fixed rate deals now falling despite rising interest rates

Oliver R mortgage broker in St Albans said: 

‘Even though interest rates are still rising we are seeing mortgage lenders introduce lower rate fixed deals, which is good news for anyone having to renew their mortgage deal this year.  The reason some fixed rate deals are now cheaper than at the start of the year even though interest rates are higher is that mortgage lenders are predicting that interest rates will fall at some point in 2024 when inflation is under control.  Although we are also seeing an increase in the number of mortgage products available, every time the Bank of England raises rates, we are finding mortgage lenders must pull products, which is making it very difficult to sort mortgages for customers.  However, the difference between the rate customers were paying in 2021 on a fixed rate mortgage and the deals available now is still substantially higher.  That’s why it is more important than ever to speak to a mortgage broker to determine your mortgage options and find the best product deal. Unfortunately, with interest rates increasing again and the current volatility in the financial sector it is impossible to know how long these mortgage deals will be available.  There is also a difference in opinion on what will happen to fixed rate mortgage rates over the short-term.’ 

Oliver R mortgage advisor in St Albans continued: 

‘At Lonsdale Mortgages we can discuss your personal circumstances, review your incomings and outgoings, and offer mortgage advice appropriate to your financial situation.  We also have access to the products and rates available from a variety of mortgage lenders, so you will quickly know what it available and how much it is going to cost you each month.  Our mortgage brokers can assist you with the mortgage process. We can complete your mortgage application saving you time and enabling you to quickly take advantage of any mortgage offer. We always recommend customers contact us well in advance of their mortgage renewing, so we have time to discuss your requirements and lock into a suitable mortgage product.  It is worth remembering that mortgage lenders will normally honour a mortgage deal for up to six months.  If mortgage rates increased again and mortgage deals became more expensive you would have peace of mind that you had locked into a better rate.  Similarly, if fixed rate mortgage deals continue to fall, we can review the mortgage market just before you renew to ensure there are no better mortgage options available.

In summary…

Call our mortgage brokers on 01727 845500 or complete our booking consultation to contact a member of our St Albans, Lichfield or Chippenham teams, if you want to find the best fixed rate mortgage deal available to you.

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up the mortgage repayments. 

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