Elections are around the corner, and it’s been a challenging first quarter for the Mortgage Lenders as they decreased mortgage rates, and then increased them given the uncertainty of the news from the Chancellor in his Spring budget announcement earlier this month. However, we have had some good news – UK Inflation rate has come down from the highs of 11% this time last year to around 3.5% and still forecasted to fall further (According to Office for National Statistics). This means, that we are likely heading towards some interest rate cuts by the Bank of England. Economists, at leading High Street Banks, suggest that we could see cuts as early as June 2024. This is likely to be a 0.25% cut to 5% – Bank of England Base Rate currently sits at 5.25%. The medium term forecast for Bank of England Base Rate, is to be around 3.5% by January 2026. You would not be blamed for wanting to wait and get a good mortgage rate when the Bank of England brings down their Base Rate to this lower level – however, it is important to note that this is likely to be over a 18–24-month period. In the meantime… what do you do? Each bank will have a Standard Variable Rate – Reversionary interest rate when your initial product (fixed or tracker rate) expires. Staying at the Mortgage Lenders own Standard Variable Rate, which is likely to be in the region of 7-8% or higher, means your payments are likely to increase substantially. Please note, we are more than happy to look at your own mortgage product and advise you of your likely Standard Variable Rate. This week, some Mortgage Lenders have already started pricing in these potential cuts following a positive outlook regarding the UK Inflation rates. Nationwide have dropped some of their Mortgage Product Interest Rates by up to 0.4%. Some Banks have also increased their Loan to Value ratios on their products. Yorkshire Building Society and Accord have really tried to pull the Rabbit out of the Bag in time for Easter, with a £5,000 deposit for a mortgage up to £500,000. That’s a 1% deposit! This will hopefully get the other Banks and Building Societies thinking about introducing new and innovative products. These all sound great, right?! There is one catch that you may not be aware of… the affordability calculator also needs to work in the borrower’s favour – to borrow the loan amount required, or desired!. This is where we would advise talking to a qualified Mortgage Advisor to ensure that you are using all your allowable Income(s) and making the most of your needs and objectives. Please call, email or WhatsApp us to find out how Intra Mortgage Solutions can help you. We have advisors that have been in this industry for over 25 years! They have seen the trends and change in the industry. Have a great Easter and rest assured, we will do our best to ensure you have the best advice possible, hopefully resulting in you not having to alter your lifestyle.
