The days of cheap mortgage rates appear to be a thing of the past for homebuyers and home movers alike for now. Many will be confronted by the harsh new reality when their existing fixed-rate deals come to an end in the coming months.

In the summer of 2021, mortgage interest rates were historically low at levels of less than 1%. Furthermore, the Bank of England’s base rate had been below 1% since 2009. This summer, interest rates have risen at their fastest pace in a decade, largely due to increases in the Bank of England’s base rate aimed at reducing inflation. This was followed by the financial turmoil caused by the government’s ‘mini-budget’ in September, which resulted in banks having to suspend hundreds of mortgage products which lead to a crash in the availability of loans. As a result, interest rates for mortgages have soared.

Over the last year, the average two-year rate has nearly tripled while the average five-year fixed rate has more than doubled. While borrowers have more recently seen mortgage rates level off slightly, they are still high compared to this time last year. All of this is making life more and more difficult for homeowners and those hoping to get on the property ladder.

In such an ever-changing market, we appreciate many of you will be concerned about the impact on your monthly budget. Speaking to your mortgage broker can help you understand how much you can borrow and how much you can afford to repay each month. If you have any concerns, you are very welcome to contact us. We can talk you through how the current market might impact you in the future. Once your mortgage has been agreed, they will also be able to keep an eye on the ever-changing market and notify you of any changes to the products available.

One of our existing clients originally had an offer at the rate of 6.29%. We recently reviewed this before they completed their new purchase and the rate was reduced down to 5.67%. This reduced their monthly payments by £166 per month.