A market view from our Mortgage Advice Partner, Coreco:
Although the Bank of England Base Rate was increased last week by a further 0.5% taking the overall rate to 4%, the highest it has been in almost 15 years, this move was very much expected and priced into the market already.
Whilst there could even be another move after this to 4.25%, it does look like we are now at or very close to the peak of this particular cycle.
What is interesting is that, as those looking for a new mortgage will notice, despite the Base Rate rise, fixed rate pricing has actually continued to fall slightly.
In fact, since this latest announcement SWAP rates, (the cost of future money on which lenders base their fixed rates), have actually fallen. Add to this increasing levels of competition from lenders, and we should see rates continue to edge downwards over the coming weeks.
HSBC were the first lenders to offer a 3.99% 5-year fixed, swiftly followed by Virgin money, which means others will surely follow, and we should see more fixed rates starting with a 3 rather than a 4 in the coming days.
That said, do not expect rates to get anywhere near the ultra-low rates of the past few years, as the new norm seems to be around 3% to 4% for the foreseeable future, and if 2022 taught us anything, it was to expect the unexpected.
In other words, if you need to buy or remortgage it no longer seems as important to wait to try to play the rate market. Locking into a deal now may be a good option and if rates do get cheaper before completion, we can, in most cases, change you over to the lower rate before then.
We have seen a higher than expected level of demand since the start of the year, which shows that many prospective buyers share my view that 2023 is being seen as a good year to buy, with prices easing a touch before rising again in the next few years.
Our mantra has always been that the best time for anyone to buy is when it suits them to, and it is affordable to do so. Holding off on the idea that it may be cheaper to next month or year does not always pan out, and often a chance is missed.
Whether or not rates start with a 4 or a 3 or anything else for that matter is not the point, the main point is affordability and the monthly payments. Are they affordable and do they get you the property you want at the time you want it?
The market can move in any direction, and trying to second guess what happens next is tricky at the best of times.
To find out more about currently mortgages or how Stirling Ackrord and Coreco help you, contact your local branch today.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Coreco Partners LLP is an appointed representative of Mortgage Advice Bureau Limited and Mortgage Advice Bureau (Derby) Limited which are authorised and regulated by the Financial Conduct Authority. Coreco Partners LLP. Registered office 117-119 Houndsditch, London EC3A 7BT. Registered in England Number OC371927.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is £495 of the amount borrowed.