Current interest and mortgage rates , and how these are impacting the housing market 📊
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What’s happening with mortgage rates now?
There has been lots of news about Base Rate rises and how they can impact mortgage rates. The Bank of England (BoE) meet about every six weeks to decide whether the Base Rate should go up or down, or stay the same.
On 21 September, the Base Rate was held at 5.25% after 14 consecutive rises since December 2021
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🔸 According to Rightmove's mortgage expert Matt Smith, the underlying costs of fixed rate mortgages are stable
🔸 Rates continuing to gradually drop and more lenders likely to offer sub 5% deals
🔸 This will be welcome respite for home-movers after difficult adjustment from prolonged period of ultra-low rates
🔸 The current average mortgage rate for a 5-year fixed, 85% loan-to-value mortgage is 5.60%, down from 5.69% last week
🔸 The lowest rate for this type of mortgage is 5.18%
When could mortgage rates start to drop?
Right now, financial markets predicting Base Rate is at its peak
It’s thought interest rates will remain flat for most of 2024, before starting to come down
We can expect fixed-rate mortgages to reflect these reductions
Average monthly mortgage repayments by average house price
Average monthly mortgage payment on a 5-year fixed, 85% LTV mortgage is £1,187 per month!
The current average asking price of a typical first-time buyer property is £225,244
Source: Rightmove House Price Index and Podium data
How much can you borrow with a mortgage?
The amount you can borrow with a mortgage is determined by an affordability assessment and your interest rate is determined by the amount of deposit you have, otherwise known as loan-to-value (LTV).
LTV is expressed as a percentage, and it reflects the size of the mortgage you need as a proportion of the value of the home you want to buy. The bigger the deposit you have, the lower the LTV, and vice-versa.
A good way to find out how much you could borrow is to use a mortgage calculator. And to get a personalised result by applying for a Mortgage in Principle which will take you one step closer to a mortgage offer.
Read more about the different types of mortgages and how to choose a mortgage term that meets your needs, both now and in the future.
If you would like more advice on mortgages, we will ask our Mortgage Specalists to make contact with you - to schedule a call, please email Emma Travers emma.travers@cavendishproperty.co.uk
📸 Left to right: Emma, Rosie, Lisa and Gary at Cavendish Residential 📸
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