Mortgage - Interest-Rates.Info

Comment: Look below the surface

July 8, 2024July 8, 2024 interestratesinfo

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This spring has delivered signs for cautious optimism.

The number of mortgages approved by lenders in March was 61,330; up from 60,400 in February and an 18-month high. The market is outpacing the expectations of most economists.

There are other causes for guarded celebration: effective interest rates are down to their lowest since last summer, and wage growth is outpacing house prices.

It seems likely we will edge back towards ‘business as usual’, except with slightly fewer amateur buy-to-lets

Can Labour really bring down mortgage rates?

July 8, 2024July 8, 2024 interestratesinfo

Higher mortgage rates have been battering homeowners for the best part of two years.

Average five-year fixed rate mortgages remain above 5 per cent while two-year fixed rate mortgages are close to 6 per cent, according to Moneyfacts – a far cry from the 2.5 per cent averages seen in early 2022.

Labour’s campaign promised change for the country – and falling mortgage rates would certainly represent a positive change for many.

Higher mortgage rates are due in part to the Conservative Government’s mini-Budget in 2022, when unfunded tax policies caused a market panic and sent average rates soaring close to 7 per cent.

Now Labour claims it will deliver economic stability, with tough spending rules to keep mortgage rates as low as possible.

Mortgage misery led voters to turn against Tories

July 8, 2024July 8, 2024 interestratesinfo

Tory voters lost faith in the ability of Rishi Sunak’s party to manage the housing market ahead of the election, figures reveal.

A results breakdown shows the Conservatives haemorrhaging support to Labour and the Liberal Democrats in seats with the most mortgage holders.

It came despite inflation falling to the 2 per cent target and rate cuts expected this summer.

Sarah Coles, head of personal finance at Hargreaves Lansdown, said mortgage holders were ‘unconvinced’ that Sunak’s plan to fix the economy was working.

The Bank of England began to hike rates in late 2021 to bring rising prices under control.

But the mini-budget unveiled by Liz Truss – who has now lost her seat – sent borrowing costs up in September 2022.

Rates are still at a 16-year peak of 5.25 per cent, which has piled on financial pressure.

Low-deposit deals hit two-year high: Moneyfacts

July 8, 2024July 8, 2024 interestratesinfo

The report says: “This marks the fifth consecutive month of rises. These rates remain slightly lower compared to December 2023. The average two-year fixed rate is slightly higher compared to January 2024.”

What Labour’s huge win means for pensions, mortgages and your finances

July 8, 2024July 8, 2024 interestratesinfo

Labour has made several pledges which will have an impact on households’ finances – but as it takes power it will also face significant challenges with the cost-of-living squeeze continuing to exert its grip.

Sir Keir Starmer will be the UK’s new Labour prime minister after a Conservative rout saw former premier Liz Truss and a dozen serving Cabinet members lose their seats.

Outgoing Prime Minister Rishi Sunak said he took responsibility for the electoral mauling inflicted on his party as it suffered its worst ever result.

At a victory rally in London, Sir Keir said the country can now “get its future back”.

He told jubilant activists “We did it”, adding: “Change begins now.”

Here is a look at what is on the horizon in the months ahead:

HSBC, Barclays and Yorkshire BS latest to cut mortgage interest rates

July 8, 2024July 8, 2024 interestratesinfo

Three more mortgage lenders have announced they are cutting mortgage rates, in another shift downwards for home loan costs.

Barclays, HSBC and Yorkshire Building Society have all reduced their rates, following Santander and Halifax earlier this week.

Yorkshire BS has cut its mortgage rates by up to 0.2 percentage points.

Both HSBC and Barclays’ rate changes mean they offer some of the lowest interest rates on the market.

HSBC is offering a 4.39 per cent five-year fix to those remortgaging with at least 40 per cent equity in their home. The deal comes with a £998 fee.

For those buying with a 25 per cent deposit, HSBC is now offering the lowest rate on the market.

Mortgage rates between 3.5% and 4.5% will be ‘new normal’: Lloyds CEO

July 1, 2024July 1, 2024 interestratesinfo

Mortgage rates between 3.5% and 4.5% will be the “new normal” even after base rates begin to fall, says the head of the UK’s biggest home loan lender.

“We have just come off a decade where mortgages have been in the 1.5% and 2.5% range,” Lloyds Banking Group chief executive Charlie Nunn told Sky News.

“The expectation that markets have is that interest rates won’t get below 3.5% — and that means that the new normal for mortgages will be in that 3.5% and 4.5% range.”

Nunn warned that these rates will not come to market until the Bank of England begins a series of base rate cuts.

The base rate has remained at a 16-year high of 5.25% since last August. The last time the central bank cut rates was in March 2020.

Mortgage Rates 1 July 2024

July 1, 2024July 1, 2024 interestratesinfo

The Bank of England held its Bank Rate at 5.25% in June, as was widely expected. It was the seventh time in a row the Rate has been frozen since it rose to its current level in August 2023. It had previously undergone 14 consecutive rises (between December 2021, when it stood at just 0.1% and August 2023).

The next interest rate announcement by the Bank’s Monetary Policy Committee (MPC) will be on 1 August at noon. The market is predicting that the Bank Rate will fall to 5% at that point.

Natwest lowers new business and existing customer deals

July 1, 2024July 1, 2024 interestratesinfo

High street lender Natwest will cut new business and existing customer rates by up to 0.23%, including purchase and remortgage deals.

On the purchase side, Natwest’s two- and five-year deals will fall by around 0.12% and 0.23%. This includes its fee-free two-year fixed rate at 95% loan to value (LTV), which has fallen from 6.27% to 6.04%.

In its remortgage range, two- and five-year deals will fall by around 0.08% and 0.13%. Its two-year fixed rate at 80% LTV with a £995 fee will go down from 5.66% to 5.53%.

Purchase and remortgage high-value deals will contract by around 0.1% and 0.13% respectively.

Within Natwest’s first-time buyer range, cuts of around 0.05% and 0.06% will apply. An example includes its five-year fixed rate purchase with no fee and £250 cashback at 90% LTV falling to 5.02%.

Experts reveal ways to cut mortgage payments but warn of charges for easy mistakes

July 1, 2024July 1, 2024 interestratesinfo

With the cost of living continuing to apply mounting pressure onto people’s wallets, many homeowners may be concerned with paying their mortgages.

If you feel that you’re barely struggling with keeping up with your mortgage payments, there are some things you can do to help you manage. Experts at Citizens Advice have highlighted that looking for a new mortgage deal might not be the best option.

They noted that it may be difficult “to find new mortgage deals at the moment”, but this doesn’t mean that you can’t still save money in other ways. It’s important to note that if you have already missed a mortgage payment, you should prioritise paying what you owe as growing debt can result in a lender taking you to court and ultimately lead you to losing your home.