Mortgage rates: Warning to secure new deal NOW as rates below four per cent disappear

Rates below four per cent have already started disappearing
Governor of the Bank of England Andrew Bailey
GB News
George McMillan

By George McMillan


Published: 02/03/2023

- 12:23

Updated: 03/03/2023

- 13:55

Britons have been warned to act now to avoid disappointment

Rates on fixed-term mortgage deals have started to increase again as experts warn that offers below four per cent will start to disappear.

Rates have been dropping since October when five-year deals were at their highest for 14 years, sitting at 6.51 per cent.


The number of mortgages being approved to home buyers fell for the fifth month in a row in January.

The Bank of England revealed that around 39,600 mortgages were approved for house purchase in January, down from 40,500 in December, marking the lowest monthly total since May 2020.

A number of high street banks have started to offer five-year deals below 4 per cent.

A general view of estate agent boards outside a property in Staines-upon-Thames in Surrey

gbnews

Now, a number of high street banks have started to offer five-year deals below 4 per cent.

HSBC and the Co-op are two of the banks to have launched the deals, marking the first time since autumn that deals have dropped below four per cent.

Britons have been warned to act fast if they want to get a good deal as it is likely more will start to disappear in the coming days and weeks.

Broker at L&C, David Hollingworth, warned: “These are significantly better deals than a few months ago but buyers should not keep waiting for rates to fall further.”

HSBC were the first to make the move to lower their rates in February but today increased the rate on its five-year remortgage by 0.05 per cent meaning it now sits at 3.99 per cent.

Platform, which is an intermediary mortgage lender of the Co-operative Bank, removed all of its mortgage deals last week after being overwhelmed by demand.

It had launched the most competitive rate on offer just two weeks ago for people with a 60 per cent stake in their property, offering a five-year rate at 3.75 per cent.

According to This is Money, rates will be introduced again next week.

A cyclist outside the Bank of England

The Bank of England is likely to increase its base rate later this month

GB NEWS

Rates are slowly increasing again because banks are having to pay more to borrow money to lend to homeowners.

Chief executive of mortgage broker SPF Private Clients, Mark Harris, said: “Swap rates, which underpin the pricing of fixed-rate mortgages, and have been falling since the turmoil created by the mini-budget in September, have taken a turn and moved the other way in the past couple of weeks on the back of expectations of further base rate rises.

“Subsequently, several lenders who launched sub-4% five-year fixed-rate mortgages have since increased these, with mortgage rates likely to be up and down in coming weeks.”

The Bank of England is likely to increase its base rate later this month which could increase the cost of borrowing even more.

You may like