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Bank rate and mortgages

Journalist: Frances Ivens, Telegraph

ended 06. November 2024

The market still expects the Bank of England to cut its Bank rate tomorrow (7/11) but the chance of another reduction before the end of the year has fallen to around 25%. Although another cut in the Spring is priced in.

What does this mean for fixed mortgage rates over the next 6 months?

 

8 responses from the Newspage community

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Ben Perks
Managing Director at Orchard Financial Advisers
The Bank of England have an opportunity to save the mortgage market tomorrow. I think they will make a 0.25% cut. If you ignore the blip caused by the Autumn Budget; the markets were good, swap rates were trickling downward and the inflation rate smashed through the 2% blockade. The Monetary Policy Committee have the key to unlocking the property market and igniting confidence. It will give the lenders the ability to price products more competitively and it will set 2025 up to be the year the property industry bounces back, with gusto.
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Dariusz Karpowicz
Director at Albion Financial Advice
With the Bank of England hinting at a potential rate cut tomorrow, lenders are already preemptively tightening their belts. However, the market's confidence in further reductions before the year's end has waned to a mere 25% - a far cry from the certainty of a few weeks ago.
But fear not, dear homeowners and aspiring buyers, for the spring still holds promise of another rate drop. As for the next six months, it's a bit of a mixed bag. Lenders are ever-so-slightly increasing their fixed mortgage rates as we speak, swap rates going down following the U.S. election results. Unless a true "black swan" event arises, I wouldn't expect to see any earth-shattering movements, either up or down, on the Bank of England's benchmark or the mortgage market. It's a delicate dance, to be sure, but for now, the steps seem rather measured and restrained.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
Further base rate reductions beyond this month look unlikely until spring, so it will be a long cool winter for the mortgage market lacking that needed further stimulus. Following the budget Swap rates have been increasing with the uncertainty of all the recent changes at home and across the pond take hold.
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Aaron Strutt
Product and Communications Director at Trinity Financial
Mortgage rates have been gradually increasing since the Budget and price hikes have been filtering through. Some of the bigger lenders have been holding off putting their rates up but it would not be a surprise if they went up soon. We still expect rates to come back down again next year but clearly there are no guarantees so if you are due to remortgage soon it is worth locking into a rate if you can. In a regular market, mortgage rates go up and down—this is going to happen more frequently than many particularly younger borrowers have been used to.
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Michelle Lawson
Director at Lawson Financial
The outlook for mortgages is still stormy as we navigate the fallout from the UK election, last week's Budget and now the effects of the US election. The markets need a period of settlement and stabililty as the onslaught for beleaguered borrowers has been relentless. Swap rates are still volatile and lenders are increasing rates with short notice again regardless of what Threadneedle Street does on Thursday.
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Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
With the Bank of England poised for a rate cut, the mortgage market is on the edge of an exciting shift. While some big lenders have held back from immediate rate hikes, recent budget bumps and market swings have nudged fixed rates upward. A 0.25% cut tomorrow could be the fresh breeze we've all been waiting for, giving lenders room to compete and offering some relief to borrowers feeling the pinch. As we look to next year, a spring cut remains on the table, and it could spark new momentum for the property market in 2025. For those on the verge of remortgaging, now might be the time to secure a rate before the tide shifts again. The mortgage market might still hold a few surprises, but one thing’s certain: the tug-of-war between lenders and rates is just getting started.
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Kim McGinley
Director & Specialist Broker at VIBE Finance
All eyes are on the Bank of England tomorrow, with the market still expecting that base rate cut. Let’s be real; this year’s been a rollercoaster, and whatever path we thought we were on is shifting constantly! With the budget announcement and the U.S. election over, we’re all hoping the markets might start to settle. SWAP rates have been volatile lately, pushing up lender pricing, and we’ve had a fair share of lender pullbacks. So, fingers crossed for a positive move from the Bank of England tomorrow, but let’s not get too comfortable just yet. Each month brings its own surprises, but a bit of stability heading into the new year would be refreshing. Lenders are really pricing against SWAP rates, not just the Bank of England’s decisions, but that base rate still influences market sentiment massively. The market needs another confidence boost and let's hope tomorrow is it!
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Iain Swatton
Director at Exemplar Financial Services
The Bank of England is still expected to cut its rate, but the odds of a follow-up cut before Christmas have dropped to just 25%. With another cut likely delayed until spring, fixed mortgage rates may not fall as much as previously hoped. In fact, mortgage rates have already risen sharply over the last few days, making borrowing pricier now than it was a week ago. A rate cut tomorrow may only benefit those on tracker mortgages, leaving fixed-rate borrowers waiting for relief. It seems Scrooge has arrived early, tightening belts just ahead of the holiday season.