BASE RATE UP. SOME MORTGAGE DEALS DOWN?
On 5 November, the Bank of England put the base rate up from 3.75% to 4%. In the days before the announcement, Nationwide, Barclays and Halifax cut rates on some fixed deals. NatWest lowered some rates for existing customers too.
If you’re thinking, ‘Hang on, how does that work?’, fair question.
Think of a fixed mortgage like a phone contract with a price locked in for two years. The shop can put a cheaper deal in the window tomorrow, while you carry on paying the price you agreed. With a mortgage that tracks the base rate, your rate goes up when the base rate does.
When lenders price a new fixed deal, they look at what it costs them to lend, where they expect rates to go and what other lenders are offering. This rise was widely expected, so lenders had already factored it into their pricing. And while some deals got cheaper, Moneyfacts reported that the average new mortgage rate was at a three-year high at the start of November.
Buying? Start with what you’d feel comfortable paying each month. Compare the deals you qualify for and check the fees as well as the rate.
Selling? Put yourself in the buyer’s shoes. What else could they buy for the same money? Price your home realistically and give buyers a reason to book a viewing with good photos and marketing that shows what it’s like to live there.
Coming to the end of your fixed deal? Check the end date and speak to a qualified mortgage adviser early, so you have time to compare your options.
And will house prices fall? That depends on how many homes are for sale nearby, how many buyers are looking and what they can afford.
If you’re thinking of selling in S74 or S35, drop me a message. I’m happy to talk through what’s selling near you and where your home fits.