Mortgages | What Is Happening On The Mortgages Market? | November 2022 Update

The Bank of England base rate has now increased to 3% from 2.25%, which is the highest the base rate has been since the recent fiscal crisis. There are rumours that the rates will increase further. We can all only speculate as to whether that will be the case or not.

What we do know is that (so far) this is the 7th increase this year and we started the year with a base rate of 0.25%.

Given that we have had the base rate rise from 0.25% to 3%, most fixed rate mortgages have increased disproportionately more than this.

Some commentators believe that recent political events created too much economic uncertainty. This caused the swap rates (the rate of borrowing at which lenders loan monies to each other in very simple terms) to rise very quickly resulting in the banks pulling most products, more specifically fixed-rate products, off the market completely until things settled down. Those fixed rate deals that remained saw the rates increase disproportionately higher that the base rate increases probably due to the lenders’ uncertainty of how much further the base rate (and thus, swap rates), would rise.

Now, due to the new political leadership and a change of fiscal direction and a further base rate rise of 0.75%, some lenders are LOWERING their fixed rates because of the headroom they created by earlier rate rises and because there appears to be more current stability of the swap rates market.

It is time to see your mortgage broker if you say within 6 months of coming to the end of your fixed rate period of your mortgage to try to make sense of this tumultuous period we are in.

I am here to help you make sense of it all and help you find the best options available to you.

Saan Popat

Penn Financial

saan.popat@pennfinancial.co.uk

077 8026 8027

The information provided in this article is not intended to constitute professional advice and you should take full and comprehensive legal, accountancy or financial advice as appropriate on your individual circumstances by a fully qualified Solicitor, Accountant or Financial Advisor/Mortgage Broker before you embark on any course of action.