UK Mortgage Rate Trends For 2017
0.25 per cent: that is the historic low-base lending rate in the UK. Although there were speculations that this rate could even go lower, opinions have all but changed and swung in the other direction. Experts now expect that the base-lending rate will increase, ever so slightly, from this moment on into the next 5 years. This has led to a widely spread opinion by most financial experts that homeowners should take advantage of this low base lending rate while they can because mortgage rates are very likely to rise this year.
Fixed rate mortgages
Because the market has seen a shift in opinion, there has been a marked rise in swap rates. This increase has, in turn, influenced fixed rate mortgages. Although there is a good chance that UK residents will continue to enjoy low base rates for some time still, these lending rates are poised to increase eventually. In fact, they will increase sooner rather than later. That is why most homeowners are advised to take up as much as they can when it comes to fixed-mortgage rates now before everything changes and the rates go up.
Although there are no indications that there will be a sharp and sudden increase in these rates, homeowners looking to enjoy long-term repayment security should look to take on fixed-rate mortgages while the rates are low. This means that sitting back and banking on remortgaging somewhere down the line might not be the best strategy for those who want to buy homes in the UK.
All about Brexit
One of the main reasons why there aren’t any concrete indications and opinions that the lending rates will suddenly spike is because the Brexit negotiations are still in the infancy stage and we just don’t have any meat on those bones as of yet. Of course, based on how these go, the market will react accordingly and if the dip in the value of the pound is anything to go by then there are certainly some shake-ups in the works.
What about inflation?
As things stand now, the inflation rate is quite high, at least as high as it has been since the July of 2014. This has been pushed up by rising food prices and rising airfares. So this is set to take centre stage in an economic world where Donald Trump is the President of the U.S.A and the UK is negotiating its exit from the EU. All these things will come into play and affect the lending rates going forward. All indications show that the rate will increase but not by that much.
At the moment, major lenders will still be working feverishly to trim their mortgage packages to the bone so as to be as competitive as possible. For the customers, this is excellent news. It means that you get to enjoy a wonderful market where it’s the lenders who are scrambling for your attention as opposed to the other way round.