Mortgage rates 'already starting to drop' - but analyst warns monthly payments set to rise again very soon

Mortgage interest rates have surged in recent months
Mortgage interest rates have surged in recent months
Anthony Devlin
Ben Chapman

By Ben Chapman


Published: 12/02/2023

- 13:56

Those looking to secure a mortgage for the first time are set to enjoy lower rates compared to previous months

Brits looking to buy a property are set for a boost with mortgage rates “starting to drop”, according to a leading analyst, but he warned further interest rate increases would likely undo the fall in cost.

Bank of England Base Rate rises have resulted in mortgage interest rates surging in recent months, meaning those on variable plans have seen a steady increase in their monthly repayments.


Those securing a mortgage for the first time will enjoy lower mortgage rates, according to CEO of property platform Twindig, Anthony Codling.

He told the Express: “If you are securing a mortgage for the first time, mortgage rates are lower now than they were in September and October.”

“Stability has returned” to financial markets, resulting in fixed-rate mortgages falling, according to Codling.

The financial markets had experienced a period of extreme uncertainty following the mini-budget unveiled by Liz Truss’ Government.

Codling added: “If you are coming to the end of a fixed-rate mortgage and about to re-mortgage, you will find that mortgage rates have jumped up.

Brits looking to buy for the first time are set for positive news
Brits looking to buy for the first time are set for positive news
Steve Parsons

“For instance, monthly mortgage payments on two-year fixed-rate mortgages for a £100,000 mortgage are around £180 a month more today than they were one year ago.”

Asked when mortgage rates will go down, he said that while there was already a small lull, rates were set to increase again in the coming months.

Codling said: “Mortgage rates for new mortgages are already starting to drop from their October/ November highs, but it is difficult to see how they can keep dropping whilst the Bank of England Bank Rate is still increasing.”

He added those on a fixed-rate deals who are about to re-mortgage will find that mortgage rates have jumped.

Monthly mortgage repayments are set to rise
Monthly mortgage repayments are set to rise
Joe Giddens

He said: “If you are coming to the end of a fixed-rate deal and about to re-mortgage, you will find that mortgage rates have jumped up.

“For instance, monthly mortgage payments on two-year fixed-rate mortgages for a £100,000 mortgage are around £180 a month more today than they were one year ago.”

Mortgage rates are expected to rise for those on a tracker mortgage, one where the rate is linked to the Bank of England Bank Rate.

Codling explains: “The Bank Rate is currently four per cent, and we expect it to increase to 4.5 per cent in Spring, adding around £25 per month to your mortgage for every £100,000 borrowed.”

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