What will happen to mortgage rates in 2023?
Unfortunately, there is no straight answer. However, with rates having dipped slightly, the consensus is leaning towards rates dipping even further with the possibility of mortgage rates dropping by 25% by the end of 2023.*
Why could mortgage rates drop?
The average 2-year fixed rate mortgage has fallen from 5.6% to 5.35% over the last month according to Moneyfacts*. The Prime Minister, Rishi Sunak, has helped to stabilise the economy and provided lenders with more confidence to lower their mortgage rates.**
Why did mortgage rates increase in the first place?
A combination of escalating inflation and market panic, following the mini budget in September 2022, triggered the Bank of England to raise interest rates to try and control the situation.
What can I expect if I am coming out of a fixed deal?
Once the fixed term expires, you will automatically transition over to the lender’s standard variable rate (SVR). Depending on the term, it is likely that you’ll find remortgaging costly, especially if you have been on a 5-year contract or longer.
Is a tracker or fixed rate right for me?
There are pros and cons to both and this is where a mortgage advisor can help. They will be able to consider your personal circumstances and affordability and make suggestions based on your situation.
However, “It is anticipated that fixed interest rates will fall further in the months to come to entice new business,” says Rachel Springall from personal finance website Moneyfacts. *
Is there still going to be uncertainty in 2023?
It’s possible that this year may provide better deals due to mortgage rates easing, nonetheless, there is still doubt around what will happen with interest rates and inflation is still not under control.
What would you advise?
With all the varying factors to consider, it is advisable to shop around for a competitive rate and to seek the help of an experienced mortgage broker.
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