Average mortgage rates have been falling slowly throughout August, despite expectations that the Bank of England will continue raising rates.
Despite forecasts that the base rate could peak at 5.75% early next year from 5.25% now, a number of lenders have slashed some of their 2 and 5-year fixed rates recently by around 0.5 to 0.75 percentage points.
The rate of inflation has been falling in the UK, which is giving banks and building societies more confidence to lend money to borrowers at a cheaper price.
Banks are also aware that the housing market is showing signs of slowing down and that very high rates are putting borrowers off. To attract customers, rates will need to fall.
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Source: The Times Money Mentor 29/08/2023
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