It’s been a year of startling interest rate rises that have made life tough if you’ve been looking for a mortgage or remortgage. But there are signs that (thankfully) 2023 might bring slightly lower rates.
Last week (at time of writing) something important happened. At least, it’s important if you’re wanting a mortgage or remortgage anytime soon. Interest rates crept under 6% for the first time since October.
Better still, Zoopla expects them to fall further, saying: “Mortgage rates are expected to fall to 4-5% next year.”
Will mortgage rates definitely fall?
Not definitely. At the start of 2022 mortgage rates were hovering around 2%. Back then we couldn’t have predicted an invasion of Ukraine and the havoc Russia wreaked, nor could we have anticipated the events closer to home in the autumn which sent global markets into a state of shock.
So there’s no guarantee rates will fall. There’s always the potential for domestic or global events to send things into a tailspin, and while the world continues to try and put a lid on inflation there’s always the risk of further increases.
But assuming none of that happens, a growing number of commentators (although not all) are predicting a rate drop.
Will mortgage interest rates keep falling?
This is far less likely. If we see rates reach somewhere around the 4.5% mark, the chances are they won’t drop much lower. As Zoopla puts it, “the days of ultra-cheap money are now behind us.”
What difference will a rate drop mean to me?
Let’s assume that you’re taking a new, £180,000 mortgage over 30 years at an interest rate of 5.95%. Today, your monthly repayments would be £1083.91.
Now, let’s suppose that over the first few months of 2023, interest rates drop by a total of 1.45% taking them down to 4.5%. Your monthly mortgage payment would be a more manageable £920.87.
That’s a saving of more than £163 each month or almost £2,000 each year.
How can I get the best mortgage deal?
Talk to us. It’s never been more important that you do, because every 0.1% you save on your mortgage rate is money you don’t have to find each month.
Unlike regular lenders, we’re not limited to a small range of products, so we can find the very best deals from across the market, based on your circumstances.
Keep your fingers crossed that rates keep falling, and talk to us now.
Remember: Your home could be repossessed if you do not keep up repayments on your mortgage.