Finally – a little bit of good news.
There seems to be some light at the end of the Kwasi Kwarteng-manufactured tunnel, with mortgage rates falling this week and the property market stabilising once again. After Kwarteng’s rather disastrous mini-budget last September, mortgage rates increased to peaks of 6%, and potential buyers were less enthusiastic about making moves. Teamed with uncertain economic conditions, the outlook on the housing market appeared to look a little grim for 2023. However, since Rishi Sunak’s government takeover, the rate of inflation has started to drop and the economy appears to be stabilising.
This week’s surprise reduction in mortgage interest rates comes as competition between lenders intensifies, and they start to offer more enticing mortgage products to attract customers. Not heard of the term “mortgage products” before? Mortgage products are basically the different categories of mortgages that a lender will have to offer you. You may have heard of fixed-rate mortgages and tracker mortgages before – these are examples of different mortgage products. Depending on the lender, there will be pros and cons to each product, so make sure you weigh up your options before you choose one!
What could the decrease in rates mean for you?
For starters, if you are currently paying a mortgage on your home, or are about to remortgage, a reduction in interest rates will mean you will be paying less per month for the cost of borrowing from lenders. According to The Telegraph, borrowers could hope to see their monthly mortgage payments fall by as much as 25% by the end of 2023. This is a welcome development for homeowners, who look set to save £4,500 a year as a result!
This news will also be music to your ears if you are hoping to get on or move up the property ladder. Lower interest rates could mean your chances of securing a mortgage are much more likely than they were at the end of 2022. The surprise cuts to interest rates are being offered by high street lenders like Barclays, Santander and Nationwide on new mortgage deals. So, if you are thinking about buying a property, now could be the right time to get speaking to an advisor and take advantage of the lower interest rates.
At Watermans, we are committed to offering straightforward property advice. Our aim is to cut through the noise of the media scaremongering around economic issues and make sure that you know where you stand with your property sale or purchase.
If you are interested in selling your home, get in touch with our property team today by filling out the form below, or call us on 0131 555 7055. And, now that the mortgage rates are dropping… it could be time to start looking for somewhere new.