Mortgage rates fall as lenders look to compete!

UK mortgage rate forecast

There are hopes that mortgage rates could drop further in the autumn with the slowdown in the mortgage market forcing lenders into cutting rates to attract new borrowers.  
Typical rates on fixed-rate mortgages fell throughout August, bringing to an end three consecutive months of rises and adding weight to predictions that rates may have peaked, with the Bank of England holding the base rate at 5.25% in September many mortgage commentators believe there is scope for the cost of fixed-rate mortgages to continue to fall.

Lenders seem increasingly confident in cutting rates given that inflation in the UK now appears to be on a downward path. In addition, some lenders have been lowering mortgage rates to better compete for the attention of a smaller pool of mortgage borrowers.

Fixed-rate mortgages fall back

Those looking for a fixed-rate mortgage will welcome the news that rates have been falling. According to Rightmove data, average rates at every loan-to-value (LTV) it monitors for two and five-year fixed-rate mortgages ended the month of August lower than where they began.

Some of the largest cuts were seen on five-year fixed mortgages available to borrowers with a 15% deposit or equity – 85% LTV – where average rates dropped from 6.15% at the end of July to 5.77% as at 30 August. But better deals can be had, and it was possible to find a rate as low as 4.99% by shopping around for the best mortgage lenders and deals in the autumn.
“While the pace of average rate drops has held steady, falls in the lowest rate available have recently accelerated quite significantly across many loan-to-value ranges, reflecting more rate cuts from major lenders and some competition for mortgage business continuing to build,” noted Matt Smith, mortgage expert at Rightmove.

If you’re interested in finding out how the latest announcement from the Bank of England will effect the local property market, contact Arins today to arrange a free, up-to-date valuation and advice meeting.

Arins - letting homes in Wokingham, Lower Earley, Tilehurst, Reading and Winnersh since 2009.

Share: