Rachel Springall, Finance Expert at Moneyfacts, said:
“In a somewhat inevitable turn of events, fixed mortgage rates rose month-on-month as lenders rushed to re-price products due to volatile swap rates. This month the average five-year fixed rate felt a notable monthly rise, and during 2024 the rate has not fallen as much as its two-year counterpart. This will come as disappointing news to those borrowers who prefer to lock into a deal for the longer-term. On the other end of the spectrum, both the average two-year tracker rate and Standard Variable Rate (SVR) fell in the aftermath of the Bank of England base rate cut. However, borrowers would be wise not to stick on their revert rate, as these are still charging much more than their fixed rate counterparts. There are estimated to be millions of borrowers who have not yet re-fixed their mortgage since rates started to rise in 2021, so seeking advice is wise. Those who locked into a five-year fixed deal back in 2019 on average would have been charged 2.74%, but that rate has almost doubled, now 5.28%.
“One positive outcome of November was a slight uptick in product availability, and a calming in the average shelf-life of a mortgage, which rose from 17 days to 21 days. This indicates that lenders are not re-pricing or pulling deals as aggressively as they were during October. However, lenders will now need to grapple with any future uncertainty surrounding interest rate pricing while aiming to hit any year-end targets. Borrowers will hope that mortgage rates will drop next year, and while there is speculation over multiple cuts to the Bank of England base rate, stubborn inflation can delay such decisions. In addition, the present market proves that a base rate cut does not always mean fixed mortgage rates will immediately fall if there are other economic challenges in play for lenders to consider.
“First-time buyers may well be struggling to amass a large enough deposit to get their foot onto the property ladder, but in good news the number of deals at 95% loan-to-value now stands at its highest point in over two years. However, the market could always do with more product innovation to help those struggling to get a mortgage. Those stuck paying rent may feel their homeownership dreams are scuppered because of the lack of affordable housing, which will take time to improve. As we move into 2025, it will be interesting to see how lenders will balance supporting their existing customers and enticing new business as the future of interest rates remains unpredictable.”
Rachel Springall, Finance Expert at Moneyfacts, said:
“In a somewhat inevitable turn of events, fixed mortgage rates rose month-on-month as lenders rushed to re-price products due to volatile swap rates. This month the average five-year fixed rate felt a notable monthly rise, and during 2024 the rate has not fallen as much as its two-year counterpart. This will come as disappointing news to those borrowers who prefer to lock into a deal for the longer-term. On the other end of the spectrum, both the average two-year tracker rate and Standard Variable Rate (SVR) fell in the aftermath of the Bank of England base rate cut. However, borrowers would be wise not to stick on their revert rate, as these are still charging much more than their fixed rate counterparts. There are estimated to be millions of borrowers who have not yet re-fixed their mortgage since rates started to rise in 2021, so seeking advice is wise. Those who locked into a five-year fixed deal back in 2019 on average would have been charged 2.74%, but that rate has almost doubled, now 5.28%.
“One positive outcome of November was a slight uptick in product availability, and a calming in the average shelf-life of a mortgage, which rose from 17 days to 21 days. This indicates that lenders are not re-pricing or pulling deals as aggressively as they were during October. However, lenders will now need to grapple with any future uncertainty surrounding interest rate pricing while aiming to hit any year-end targets. Borrowers will hope that mortgage rates will drop next year, and while there is speculation over multiple cuts to the Bank of England base rate, stubborn inflation can delay such decisions. In addition, the present market proves that a base rate cut does not always mean fixed mortgage rates will immediately fall if there are other economic challenges in play for lenders to consider.
“First-time buyers may well be struggling to amass a large enough deposit to get their foot onto the property ladder, but in good news the number of deals at 95% loan-to-value now stands at its highest point in over two years. However, the market could always do with more product innovation to help those struggling to get a mortgage. Those stuck paying rent may feel their homeownership dreams are scuppered because of the lack of affordable housing, which will take time to improve. As we move into 2025, it will be interesting to see how lenders will balance supporting their existing customers and enticing new business as the future of interest rates remains unpredictable.”
