Martin Lewis has issued a warning with his Money Saving Expert team over mortgage rates falling. The BBC Sounds star spoke out via the Money Saving Expert website after the Bank of England interest rate cut, which came last week across the UK.
Fixed-rate mortgage deals have dropped below 4% for the first time since April – though only for those with at least a 40% deposit or equity in their home. However, mortgage brokers say rates could continue to fall as the year goes on.
MSE said: “Since we first published this story, the Bank of England has cut the base rate from 5.25% to 5% – the first cut in over four years. As a result, tracker mortgages (which are linked to the base rate) are getting cheaper, reducing the gap between the cheapest trackers and fixed-rate mortgages.
While fixed-rate mortgages aren’t directly affected by the change in the base rate, some lenders have since reduced the rates on their fixed deals. The cheapest five-year fix is now 3.95% from HSBC (down from 3.99% with Nationwide).
“NatWest has also launched a five-year fix at 3.97%. Barclays is set to launch a five-year fix at 3.84% on Thursday 8 August. However, the HSBC, NatWest and Barclays deals are only available to those buying a property, not those remortgaging, and you’ll need a 40% deposit.
On whether to wait to get a new mortgage or switch now, MSE also had guidance for 700,000 households set to roll off a fix in the second half of 2024. It warned you to “consider temporarily moving on to a tracker mortgage” or “arrange a new fix in advance.”
Giving its reason, it said: “Some trackers don’t have early repayment charges, meaning you could switch to a fixed mortgage penalty-free once you’re ready. But all trackers have a variable rate of interest, meaning what you pay can change.”
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