For those of you old enough to remember the classic BBC sitcom Dad’s Army it really is a case of “Don’t panic Pike” as the media explodes with news about imminent rate hikes, costs doubling, and all that malarky.
As I commented to them, “Given the recent inflation figures and the corresponding jump in SWAP rates, upon which lenders price their fixed rates, it is no surprise that we have seen lenders increasing their mortgage pricing.
“It does now look like the era of ridiculously low rates is coming to an end, but we must remember that we are still in a low-price environment overall.
“As the Bank of England weighs up whether to finally raise the rate of interest themselves, there is now a whole generation of borrowers who have never experienced a rate rise of any kind.
“The message to borrowers coming to the end of their current product term and to prospective buyers is clear; now is the time to act to secure one of the lowest rate products. We may not see the like again in a long time.”
It is, however, easy to see why this is such a big thing, as apart from a couple of small rate rises in 2018, we have not seen any sustained rate rises since way back in 2007. That’s a whole generation of borrowers, buyers, lenders, agents, brokers, and regulators who have never experienced a rising rate environment before.
We have already seen the last of the 5-year fixes below 1% disappearing into the ether, to be fondly remembered only by those who managed to grab such a historic product.
Whether we will ever see their like again remains to be seen.
What is more, it is easy to see that those taking out a 1% fixed rate now, may well be remortgaging at 2% or 3% next time, so although rates will still be low historically speaking, proportionally it feels like a big rise.
We may still see the Bank of England hold their nerve until early next year though, but this week’s Bank of England Base Rate announcement will be the most keenly watched for years.
For now, though, we look set to have a busy end to the year as buyers rush to grab these deals and clients rush to remortgage.
Have a great week and remember, “Don’t tell them your name Pike”!
Best Mortgage Rates
In terms of mortgage rates, for standard residential mortgages, borrowers can obtain 2-year fixes at 0.99% (3.20% APRC) and 5-year fixes from 1.12%, (2.70% APRC) whilst variable tracker rates are around from 0.85%, (3.30% APRC).
Those looking at Buy-To-Let can now obtain products from 0.99%, (4.40% APRC) for a 2-year fixed or 5-year fix are available from 1.49% (3.70% APRC).