Halifax<\/a> is still offering its two-year tracker mortgage with a rate of 3.96 per cent, with a \u00a31,499 fee and a 40 per cent deposit required.<\/p>\nDavid Hollingworth, associate director at L&C Mortgages, said: \u201cRates have been gradually easing back for a number of weeks. That has been in part to a gentle improvement in swap rates, but also as a result of lenders looking to hone their competitive edge.\u201d<\/p>\n
Smaller lenders, Fleet Mortgages and Virgin Money, also cut their rates this week.<\/p>\n
Currently, the average two-year fixed rate is 5.59 per cent, according to Moneyfacts, whilst the five-year is 5.57 per cent.<\/p>\n
What could happen to rates long term?<\/p>\n
Experts warn that forecasts remain highly uncertain and hinge on how the war continues to play out.
If the war in Iran ends and the geopolitical climate generally stabilises \u2013 with a peace deal likely to help \u2013 rates should continue to come down slowly over the long term.<\/p>\n
But if the Middle East conflict continues to escalate or other factors like a change in prime minister occur, this could spook the market or cause inflation \u2013 and subsequently interest rates \u2013 to rise.<\/p>\n
Steven Greenall, mortgage adviser at Protect & Lend, said: \u201cIn 6 to 12 months, rates should be within 25 basis points of where we are today, unless there is a black swan event (an unexpected event).\u201d<\/p>\n
Strutt added: \u201cIf the war in the Middle East ends and the BoE does not put up the base rate, then hopefully fixes will be roughly where they are now or a bit cheaper [over the next 6 to 12 months].<\/p>\n
\u201cIf there is a change to our prime minister, then the market could also worry because of the uncertainty that this could bring again,\u201d he added.<\/p>\n
\u201cIf rates can get closer to 4 per cent again, then borrowers will think they are getting good value for money again.<\/p>\n
\u201cMany mortgage borrowers expect the medium-term outlook will lead to lower mortgage rates because the BoE does seem to want the base rate to come down. They are still locking into three and five-year fixes because they don\u2019t want to wait and see what happens.\u201d<\/p>\n
Some experts disagree and say the uncertainty is still putting pressure on households.<\/p>\n
Lewis Shaw, broker at Shaw Financial Services, said: \u201cI cannot see mortgage rates falling far enough to take the pressure off anyone. Lenders will scrap over what little business there is, but a price war among the desperate is not the same as rates actually coming down.\u201d<\/p>\n
What to do if you\u2019re due to remortgage<\/p>\n
While brokers hope rates will continue to creep down over the next few months, they advise against waiting to see if your fixed mortgage deal is due to end, as any changes in the war in Iran could cause rates to spike again, while most lenders\u2019 Standard Variable Rates (SVR) are much higher.<\/p>\n
The average SVR was 7.13 per cent as of the end of May.<\/p>\n
Shaun Sturgess, director at Sturgess Mortgage Solutions, said: \u201cIf your fixed rate is ending in the next few months, the worst thing you can do is nothing.<\/p>\n
\u201cMost lenders will automatically move you onto their SVR when your deal expires, which can be significantly higher than the best rates currently available.<\/p>\n
\u201cThe good news is you can secure a new rate up to six months in advance, so there is no benefit to waiting. If rates drop before your completion date, most lenders will allow you to switch to a better deal anyway.\u201d<\/p>\n
For those looking to fix, it may be difficult to decide for how long, given the market volatility.<\/p>\n
Hollingworth said: \u201cWe are seeing a mix between those hoping rates could potentially fall back sooner than expected and those keen to eradicate volatility.<\/p>\n
\u201cThe former may prefer a shorter lock-in period in the hope that rates will have fallen when they come to review, while the latter group will be looking at 5 years and potentially beyond. The good news is that rates have been improving across the board.\u201d<\/p>\n
It may be worth speaking to a broker in the run-up to your mortgage deal expiring, as they can compare hundreds of products across the market to find the best fit for your circumstances.<\/p>\n","protected":false},"excerpt":{"rendered":"Two major lenders have cut their mortgage rates as experts predict they will continue to come down over…\n","protected":false},"author":2,"featured_media":65732,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[21264],"tags":[1256,3343,2089,2103,1623],"class_list":["post-65731","post","type-post","status-publish","format-standard","has-post-thumbnail","category-barclays","tag-bank-of-england","tag-barclays","tag-homes","tag-interest-rates","tag-property-prices"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@UnitedKingdom\/116771255921602301","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/65731","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/comments?post=65731"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/65731\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media\/65732"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media?parent=65731"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/categories?post=65731"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/tags?post=65731"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}