Given the uncertain mortgage times we are in, and the number of questions I know everyone has at the moment, I’m going to try and send a weekly update about the state of affairs to keep you informed and help you make your own property decisions.
Best remortgage rates including fees today:
50% LTV
2 year fixed 5.99%
5 year fixed 5.36%
2 year tracker 5.14%
Bear in mind rates change if you have less equity, in different circumstances and also that rates to stay with your existing lender may be cheaper than this. Always check with me – the above is just to give you an indication of the state of the market.
This week SWAP rates, the rates at which financial institutions lend to each other, have risen which tends to indicate mortgage rates will rise further. Lenders have definitely been pulling rates at short notice again this week and increasing both new and existing customer rates over the weekend. Current predictions see SWAP rates peaking in Spring 2024 and then steadily declining. I will include an update on this benchmark figure each week. The 2 year swap rate today is 5.99% and the 5 year rate is 5.208%. This time last year the 2 year swap rate was 2.5% and the 5 year was 2.32%.
SONIA swaps Current 05 Jul 2023 06 Jun 2023 06 Jul 2022
1 Year 6.026% 5.987% 5.186% 2.374%
2 Year 5.991% 5.973% 5.052% 2.500%
3 Year 5.718% 5.705% 4.837% 2.420%
5 Year 5.208% 5.155% 4.478% 2.321%
7 Year 4.841% 4.750% 4.240% 2.231%
10 Year 4.541% 4.413% 4.073% 2.190%
Lenders are still pricing existing customer products pretty competitively and still have money to lend. The lack of purchase activity means service has been pretty good from a lot of lenders compared to the last few years of terrible covid service.
If your deal is due for renewal in the next 7 months you need to take advice NOW. Most lenders will allow you to secure a new rate now ahead of the end date in 6 months and if it’s better to remortgage you can obtain a mortgage offer that will last 6 months… rates are only likely to get worse in the short term so it’s better to secure something now. If you’re worried about the increase there may be options we can look at to make the mortgage payment lower. If you do have any savings or cash around I have seen an uptake in offset enquiries recently – this is where you keep your savings in a mortgage account offset against the mortgage balance and pay less interest. Whenever you want your savings you can take it back out at any time and you’ll pay interest on the balance. If you keep funds around for a tax bill you could offset these until you use them each year!
If you’re wondering what the interest rate difference might looking like for you the table below is useful;
The current rates and pessimistic news are having an effect on the property market and house prices are falling at the fastest rate in 12 years. I’ve definitely seen the difference in my own property sale – I started off with loads of viewings and now there’s absolutely nothing going on. We are in an interesting market as affordability is squeezed but prices are getting cheaper. There’s a lot of hesitation from people to sell but equally loads of BTL landlords suddenly trying to dispose of unprofitable property. I’m not sure how it will play out but I feel like despite the increased cost it’s actually a strong buyers market right now if you’re brave enough. Not too fun if you want to sell however!
My parting thoughts are stay strong dear clients! Always remember that a lot of this market stuff is just to do with the news and confidence. I’ve bought and sold at the best and worst times – markets always change and recover. The best advice I always hear is try your best not to time markets. I’m here to help so be ahead of the game and get in contact with me to check all your facts and figures early so you’re prepared for any payment changes. I will send this update every week until things settle down. Feel free to forward on to others. If you want to discuss any aspect of mortgage stuff book in with me here https://calendly.com/sarahcruze/30min
Have a good weekend!