Fixed rate mortgages could be on the rise

Jeni Browne explains why she thinks fixed rate mortgages are more likely to rise that fall in the coming months despite the cut in Bank Rate.

In August the Bank of England’s base rate was reduced to 0.25%, so naturally the expectation is that fixed rate mortgage product pricing will follow suit, right?

Wellllllll actually, not so! 10 year gilt yields have increased from a low of 0.527% in August to 0.98% at the end of last week. This follows Theresa May’s comments where she suggested that the Bank of England should rein in quantitative easing. Furthermore, SWAP rates have been edging up recently.

These points, combined with the fact that lenders have already factored in the base rate reduction, mean that there is every chance that fixed pricing is going to increase.

The very good news is that right now, fixed mortgage rates are very low and so this would be a very good time for people to review their mortgage arrangements and lock into the fixed rates that are available now before they increase.

Obviously, if you are already on a fixed rate – it will not rise because the rate is fixed for a certain period of time! If however, you are now on the lender’s reversionary rate, it should be time for you to review your options. You could save on your monthly mortgage payments and/or raise capital.

As ever, to talk through what this means for you, do get in touch.

Handy tools:

Buy to let calculator and rate finder
Whatever your requirements use our calculator and rate finder to filter through the products currently available on the buy to let market and find the best rate for you.

Buy to Let App
Buy To Let is a FREE iPhone and Android app for residential property investors who need instant access to buy to let mortgage rate information. The app includes a comprehensive calculator to help you search for rates that fit your circumstances and borrowing requirements. Includes a handy property portfolio manager.

Property portfolio review form
If you have your own spreadsheet, don’t’ waste time re-entering the details, just send us yours instead. We’ll then analyse the information and give you a clear picture of your investment finance together with recommendations on how to proceed and keep your investment strategy on track.