Need a Mortgage in 2023?

Hey! Steve here!

Mortgage lending had some turbulence last year, especially in the days following the mini-Budget issued by the then-prime minister Liz Truss in September... let's not go there, eh?!

Mortgage rates were already steadily increasing because of strong inflation, but the unexpected list of unfunded tax cuts caused costs to surge.

According to statistics from Moneyfacts, the average two-year fixed mortgage rate on 1st?August?2022, was 2.52%.

The figure peaked at 6.65% on 20th October 2022 and the five-year fixed rate was 6.51%?on the very same day.

However, despite a series of base rate increases from the Bank of England in an effort to combat the high level of inflation, average fixed rates for both two?and five-year mortgages have consistently decreased. At this time, they are 5.78%?and 5.62%, respectively.

But guess what...

Last week I received numerous emails from lenders to say that they were bringing rates down by up to 0.60%!

So what will happen to mortgage rates in 2023?

Most analysts currently predict that this year's average mortgage rate?will stabilise between 4% and 5%. They base this on the idea that inflation has peaked and that the Bank of England will consequently slow base rate increases... please let this be true!

Although only tracker mortgage rates are directly impacted by the base rate, lenders frequently pass on increases to consumers, raising the cost of borrowing as a whole.

There are also indications that the housing market is slowing, which could result in reduced mortgage rates as lenders compete for clients.

Should you be put off buying a home or moving?

With fixed rates starting to decrease slightly?in cost, those who are considering buying or moving home or who need to remortgage might be a little tempted to leave it for as long as possible to potentially take advantage of lower rates... that's if they continue to drop like they are doing!

I don't have a crystal ball... but rates have dropped steadily from the end of last year in to the New Year. On 1st November 2022 the average two-year fixed mortgage rate was around 6.47% and now it stands at 5.78%.

That's great right?!

Despite the above, we are still in an uncertain time and who knows if rates will continue to drop or if they'll go back on the rise. All we can do is look at the stats and make our own predications based on the facts.

If you're looking to remortgage, preparing early is key!

Lenders often let you agree a new rate up to 6 months before your deal ends which means that we can search the market for a new rate for you earlier than you might have thought.

So, if your mortgage deal is coming to an end within the next 6 months, get in touch ! Our team will discuss your options and find the best possible solution for your needs!

Until next time!

Steve

Express Mortgages is a trade name of Express Mortgage Services Ltd. Express Mortgage Services Ltd is authorised and regulated by the Financial Conduct Authority. [Reg No: 474427] Company registered in England & Wales no. 05167662

Your home may be repossessed if you do not keep up repayments on your mortgage.