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Mortgage Rates to Stay Low?

04.02.19

Mortgage rates rising or falling is always a big topic of discussion, and it has been interesting, (well it is to me), to follow the recent movements in SWAP rates which have fallen again over the past couple of weeks. With the Bank of England expected to keep rates on hold this week, especially as we enter the 2 minutes to midnight period on Brexit, there seems no reason to do anything rash now.

In fact, the markets seem to suggest that the chance of a rise this year is now down to 52% from 64% previously.

That said, there is still an eye on inflation which is expected to overshoot the Banks 2% target once more as high levels of employment and subsequent wage pressure remains. This suggests that there will still need to be a modest increase in rates sometime soon, with Investec saying that they can see a bank base rate at 1.5% by May 2020. As we get closer to this point mortgage rates will rise again.

Housing Survey

Meanwhile, the annual English Housing Survey found that 64% of the population owned their own home, which was 1% up on the year before. The peak of 71% came in 2003.

The study also found that over the past 10 years the average age of First-Time buyers has risen from 31 to 33, whilst they also reported that it seems the Bank of Mum & Dad has the most influence over home-ownership levels.

The number of people taking out mortgages also rose by 5% after falling for 10 years.

Low Mortgage Rates

You could argue that all of this shows that the pent-up demand is starting to slowly be released as potential buyers feel that they can no longer put their lives on hold. For many, the lure of a “buyers’ market” combined with mortgage rates staying low and the availability of schemes such as Help to Buy means that they feel now is a good time to finally buy.

Mortgage rate wise things are still pretty much the same. For standard residential mortgages, borrowers can obtain 2-year fixes at 1.39%, (4.80% APRC) and 5-year fixes from 1.80%, (3.36% APRC) whilst variable tracker rates are around from 1.34%, (3.82% APRC).

Those looking at Buy-To-Let can still obtain products from just 1.44%, (4.44% APRC) for a 2-year tracker or 5-year fixes are available from 2.02% (4.03% APRC).

If you want to grab one of these deals, click here!

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