Some Mortgage Rates Predicted To Rise From Today

11th October 2024

Falls in mortgage rates could come to "an abrupt halt", according to brokers, with expectations that home loan costs may rise in the coming days.

Lenders have been locked in intense competition for borrowers in recent weeks, which has led to consistent falls in the interest rates charged on new fixed mortgage deals.

This has led to more activity among buyers and sellers in the UK housing market.

But one lender, the Coventry Building Society, is putting up mortgage rates on Friday, and others are expected to follow suit in the coming days.

"The mortgage market has seen rates falling in recent months but that may be coming to an abrupt halt," said David Hollingworth, associate director at broker L&C Mortgages.

How borrowers are affected
About 1.6 million existing borrowers had relatively cheap fixed-rate deals expiring this year. Hundreds of thousands of potential first-time buyers have been hoping to get a place of their own with their first mortgage. All would welcome low mortgage rates.

The interest rate on a fixed mortgage does not change until the deal expires, usually after two or five years, and a new one is chosen to replace it.

Someone getting a mortgage a year ago, and able to offer a 40% deposit, faced an average interest rate on a two-year fixed deal of 6.16%.

However, by October this year, the average rate had dropped to 4.84%, according to financial information service Moneyfacts.

The reduction is the result of competition between lenders, and the Bank of England making its first cut in the benchmark interest rate for four years in July.

There could be knock on affect on rents.

Read the full article on the BBC web site