Mortgage rates have been very turbulent over the past 18 months, increasing drastically after the mini-Budget in September 2022 before decreasing steadily across 2023.
But since the start of this year, mortgage rates have begun to creep back upwards with several big lenders such as Santander, HSBC, and NatWest announcing rate rises just this week.
With this level of uncertainty and change in the market, the question is what will happen to mortgage rates in the future?
Appearing on this week's FT Adviser podcast, Hodge retail managing director, Christie Cook looked at what could happen to one of the biggest factors for mortgage rates, the Bank of England’s interest rate.
She said: “Originally we thought the base rate would fall around May or June if it was going to go lower but I don’t think that’s the market view anymore. I think it will be 2025, maybe the end of 2024 but it really depends on what happens throughout 2024.”
Also appearing on the podcast, Ash Ridge private finance equity and release adviser, Jane King, recounted the initial chaos that followed the mini-Budget.
“We were all cruising along on a wave of low interest rates and then, post mini-Budget, Armageddon happened and phones were ringing off the hook.”
King said following this the only thing lenders could do to encourage more business was to start dropping their rates down.
“We have seen rates come down, there were some quite large reductions in the beginning but now they’ve become quite smaller increments. However, we are starting to see some long term rates creep back up again.”
Also apprearing, London Money director, Martin Stewart, said: “We should congratulate the mainstream media to a degree because they’ve done a lot of our marketing for us.
“No one really cared about mortgage rates, they’ve been so benign over the past 15 years everyone had forgotten that they were a moving mechanism. Now, no one comes to us surprised about the cost, it’s embedded now into borrowers’ numbers.”
The FT Adviser Podcast is available on Spotify, Apple Podcasts, Acast, Google Podcasts and most other major podcast platforms.
tom.dunstan@ft.com