Martin Lewis’ Money Saving Expert has warned UK households whose mortgage is at a rate which is OVER four per cent. The BBC Sounds and ITV star’s MSE team have issued an update to households as mortgage rates continue to drop.
MSE said: “Fixed-rate mortgage deals have dropped below 4% for the first time since April.” It added: “This improvement in rates means the top five-year fixes now cost around £18 a month less per £100,000 owed (or around £220 a year) compared to just a couple of months ago.
“However, those with smaller deposits or less equity in their home aren’t benefitting as much, as rates on 90% loan-to-value (LTV) mortgages have only fractionally improved.” Ray Boulger, of broker John Charcol, said: “With inflation now down to the Bank of England’s 2% target level, I expect the falling trend in the cost of fixed rates to continue through to next year as the market anticipates a cut to the base rate, with a 3.5% five-year fixed rate on the cards by early 2025.”
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Aaron Strutt, of broker Trinity Financial, said: “Lenders are still trying to stimulate the property market… They do not need to work quite so hard to get remortgages business because there are so many borrowers that need to switch deals before the end of this year.”
Malcolm Davidson, of broker UK Moneyman, said: “It’s not always what’s happening in the economy that affects interest rates; it’s the ability of lenders to service the demand for a particular product.” David Hollingworth of broker L&C Mortgages said: “I’m not sure that swap rates are low enough for all lenders to rush in below 4%.
“Let’s see what the tone of the base rate decision is on 1 August – that could help to see a reduction if it sounds more likely that cuts will be more than a single one this year.”
