Mortgage interest rates, when should you act and will they go up or down?

The Bank of England increased the base rate from 2.25% to 3% on 3 November. This was the biggest rise in interest rates in over 30 years.

Annual inflation / consumer price index (CPI) shows that the latest data in October has seen an increase to 11.1%. This is up from 10.1% in September and prices are rising quickly due to the cost of energy, compounded by the war in Ukraine.

The financial markets are therefore pricing in further rate increases in 2022 and 2023, with the market predicting that the Bank of England base rate will rise above 4% in early 2023 and potentially as high as 4.8% by July.

The effect on 2-year fixed rate mortgages could see rates at 6-7% good to hear from you plus.

Should you fix your mortgage rate now?

With the base rate at 3% and markets predicting two-year fixed rate mortgage pricing at over 6%. It is time to seriously consider fixing your mortgage rate, especially if you are worried about how high interest rates might go, and how increased mortgage costs will affect you.

If you are currently on a fixed rate and this is due to end within six months. It is possible to lock in a rate today that will potentially be cheaper than in 2023. You do not need to complete on the new deal until any current early redemption charges have ended.

Historically the best fixed rate mortgages will quickly disappear at any sign of the Bank of England raising interest rates.

Working with MMPE

At MMPE we are working with clients to secure rates as early as possible, trying to beat any further rate increases. We are also aware, that potentially better options may become available, and you may want to keep your options open.

We have therefore been revising our processes and for a small administration fee can assist with securing a preferred scheme up to 6 months prior to your scheme end. Then, schedule a further review, to research options 3 months prior to your completion date. If better options are available, a change of scheme/lender can then be processed. We are hoping that this service will provide peace of mind for our clients and assist with securing the best possible product options.