As of 6th October, we have seen multiple lenders fall below 5 % interest charged on some fixed rate residential mortgages, with a rate war appearing to break out between the lenders and further announcements being made every day.
The consequence is the difficult consideration for client[JP1] s to decide whether they fix now or try and hold out whilst rates continue to fall.
This month the base rate held for the first time after 14 consecutive months of increases, which has been a catalyst for rates falling. This gives cause for optimism of falling interest rates and inflation, which in turn should lead to mortgage rates falling further.
It is not unrealistic to consider the base rate not falling as sharply as desired, or indeed having to hold further for a while as the Government continue to attempt to lower inflation, but as long as the overall trajectory of rates is downward, the consequences should be positive.
Conversely bank account interest rates should act in the same vein, meaning that fixing some surplus cash is again worthwhile discussing with one of our advisers before rates start to fall.
As always, it’s important to seek advice on the best option for you personally. There is no one size fits all approach and understanding the right mortgage deal for you is now more important than ever before.
Matthew Harrison DipPFS
Wealth Management Consultant - Tower House Wealth Management
01522 518759
