So, there’s plenty of activity. To get a sense of any emerging patterns in the marketplace, Mortgage Introducer has consulted two leading industry experts – David Hollingworth (pictured left), associate director at L&C Mortgages, and Nicholas Mendes (pictured right), head of marketing at broker John Charcol.
“Rates have bounced around all year and although generally they are lower, they nudged back up in recent months,” Hollingworth noted. “However, they now seem to have reached the point where they are settling down and finding the level. This often happens when rates take a turnabout as lenders react and then potentially find they have pushed rates up too far. They are now able to make improvements and we’re seeing a growing number of lenders looking to nibble away at rates.”
Hollingworth acknowledges that rates aren’t quite being slashed – yet. “These aren’t big cuts but the market is so competitive that lenders pass through improvements wherever they can and as more take the chance to sharpen rates, the more likely it is that others will follow,” he reasoned.
Geopolitical factors could, of course, influence the marketplace, but so far global concerns don’t appear to making too much of an impact. “The tension in the Middle East doesn’t seem to have spooked the markets and swap rates have generally eased back,” Hollingworth said. “They are, however, very flat and pricing on two- through to five-year fixed rates is looking very similar. That suggests that the markets are anticipating that interest rates are getting closer to the bottom and are expected to stay there. Of course, with a good deal of uncertainty it’s really hard to know what could be round the corner and we know that forecasting can change rapidly.”
He added: “Lenders may continue to make some reductions although I’d expect that they will come through lots of small adjustments as things stand. Customers certainly shouldn’t be clinging on to the hope of ever lower rates and it makes sense to plump for the right deal now and then seek a review before completion to see if there is further movement in their favour.”