When will the Bank of England cut interest rates? And will the cost of my mortgage go down?
A quick read with updates from Rightmove's Tim Bannister on the outlook for interest rates in the coming months.
Until July 2021 we had the lowest interest rates the country had ever seen at 0.1%, which meant cheaper mortgages and cheaper lending. It all came to a swift end however with 14 consecutive base rate rises causing agony for house movers and homeowners on variable rates.
The Bank of England has held interest rates at 5.25% since 2023, but will we finally see cuts to the base rate at some point soon?
Rightmove's Tim Bannister has suggested that the financial markets expect that the first base rate cut will be in August or September this year. Though this could change in coming weeks it would be a boost for home movers.
What has happened to mortgage rates recently?
- In July 2021, before the Bank of England increased the base rate the average mortgage rate was 2.51%
- The current average five year fixed rate is now 4.97%.
- Interest rates peaked at 6.11% in July 2023.
If the base rate is reduced will my mortgage payment go down?
- If your tied into a fixed rate your mortgage should remain at the current payment/interest rate until the end of your fixed term. When this term runs out you may be able to re-mortgage onto a different product, lender or variable rate, speak to your mortgage advisor about your options.
- If your on a variable rate your mortgage lender may reduce the rate your paying, or you may be able to find a cheaper fixed rate option. Discuss the choices with your mortgage advisor.
- If your looking to buy a property or move house lenders may reduce the rates available to you, hence making your monthly payments more affordable than previously.
What is happening to house prices?
- The monthly average asking price has dropped by 0.4% but the annual average asking price is still up by 0.4%
- The North West market is performing better than the UK average with a monthly increase of 0.8% and an annual increase of 3.5%.
With potential interest rate cuts on the horizon and the election out of the way Rightmove's Tim Bannister is hinting of a promising autumn property market.
If you are thinking of making a move this year then get in touch with us to discuss why now might be the right time to sell or get an accurate up to date valuation.
Contact us:
Bebington Branch
0151 644 6000
lesley@lesleyhooks.co.uk
Bromborough Branch
0151 334 5875
rachael@lesleyhooks.co.uk
Click HERE for a free instant online valuation.
*Data provided by Rightmove*