In the ever-evolving UK mortgage landscape, many are left wondering if they should wait for the Bank of England to cut the base rate before making a move. While the base rate plays a significant role in determining mortgage costs, the reality is that waiting for a cut might not be necessary. Here’s why:
The Current Mortgage Market Landscape
The UK mortgage market is showing signs of recovery and strength, with mortgage approvals hitting their highest levels since 2022. In July 2024, British lenders approved 61,985 mortgages, surpassing forecasts and signalling renewed momentum in the housing market. Although there may be yet another base rate cut by the Bank of England later this year, mortgage rates have already started to decline, with some lenders offering rates below 4%.
Why You Should Act Now
1. Falling Rates and Competitive Offers:
Recent cuts by lenders such as HSBC, Halifax, and Nationwide have pushed some fixed rates below 4%, and more cuts could follow as the market remains competitive.
2. Flexibility in Mortgage Deals:
By securing a deal now, you lock in a good rate while retaining the option to move to a lower rate if your broker do this for you. If you apply for a mortgage directly through a lender they may not switch you over if they reduce their rates.
3. Avoiding Higher Standard Variable Rates (SVR):
If you wait too long, you could end up on your lender’s standard variable rate, which could be significantly higher. The current SVR is around 8.18%, compared to fixed-rate deals below 4%.
Strategic Considerations
1. Personal Financial Review:
Assess your current financial health and credit status. A strong profile will give you more bargaining power. If you find your credit file a daunting read, bring it over to your mortgage adviser or if you have not got one, do make contact with us.
2. Stay Informed:
Keep an eye on economic trends and collaborate with your mortgage broker to understand how these affect your options.
3. Explore Product Features:
We don’t just compare the rate and fees, we also look if the lender offers rate-switching, early repayment charges, overpayment options, and payment holidays. These features can provide more flexibility in uncertain times.
Looking Ahead
While it’s impossible to predict every move of the Bank of England, the outlook for the mortgage market is positive. The combination of competitive rates, proactive lender behaviour, and ongoing support for first-time buyers suggests that acting now could be advantageous. In conclusion, rather than waiting for a base rate cut, consider leveraging current market conditions with the help of a skilled mortgage broker. This proactive approach ensures you’re positioned to take advantage of favourable terms now and in the future. Why not reach out to us today?!
