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SONIA swap rates fall following Liberation Day: Trump "may be single-handedly rescuing the UK housing market"

Journalist: Riz Malik

ended 03. April 2025

SONIA swap rates have fallen this morning following Liberation Day in the US. According to Bloomberg, traders are now pricing in nearly 63 basis points of cuts from the Bank of England with the expectation of three rate cuts this year. The impact of tariffs on the UK economy seems to outweigh other economic factors that could keep rate cuts at bay. Newspage asked brokers what impact this could have on the property market and mortgage pricing — and whether Trump helped first-time buyers and homeowners in the UK. Views below.

10 responses from the Newspage community

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Stephen Perkins
Managing Director at Yellow Brick Mortgages
There has been an equilibrium between the desire to help an ailing economy with rate cuts and the need to keep inflation down with rate holds at the Bank of England of late, with predictions of only a couple of reductions in 2025. President Trump's tarriffs have taken a sledgehammer to the scales of that equilibrium and damaged the world economy, so now there is growing pressure on more rate reductions this year to provide life support to the UK economy to compensate for the impact of the tarriffs.
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Mike Staton
Director at Staton Mortgages
Being in the mortgage industry over the past five years has given us front row seats to view disaster after disaster. Whilst Trump's actions may appear to be damaging the global economy, he may be single-handedly rescuing the UK housing market, something that the current Labour government seem completely incapable of.
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Emma Jones
Managing Director at Whenthebanksaysno.co.uk
SONIA swap rates have taken a decent dip across the board—2 to 10-year swaps are all down 7–9 bps overnight. Markets are now betting on three rate cuts this year, and lenders will be watching closely. It’s not fireworks just yet, but this shift gives fixed-rate mortgage pricing some much needed breathing room. If this trend holds, borrowers could start to see more competitive deals landing soon. A good day for those waiting on the sidelines.
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Riz Malik
Independent Financial Adviser at R3 Wealth
Trump’s trade rhetoric may have rattled global markets, but it could end up offering a silver lining for UK mortgage holders. Falling swap rates suggest lenders may soon reduce fixed-rate mortgage pricing, easing pressure on homeowners already hit by rising household bills and Reeves' budget. While the full economic impact of US tariffs is still unclear, a more competitive mortgage market would be a timely boost for the UK housing sector. President Trump may have earned his state visit after all.
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Ben Perks
Managing Director at Orchard Financial Advisers
As the UK economy waits with bated breath to see what toll the new tariffs will take, swap rates have tumbled. This, coupled with the improving prospect of a May Bank of England Base Rate cut, could mean a fantastic summer of lending for borrowers. We will get more of an idea over the coming days and weeks exactly what the impact of Liberation Day is, but initial signs show that borrowers and the mortgage industry may have dodged a bullet.
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Jack Tutton
Director at SJ Mortgages
The initial reaction to Trumps 'Liberation Day' looks very positive for UK mortgage holders. There is now a sigificant difference between the rates today verus a month ago, and should this continue then we could start to see these large cuts feed through into mortgage rates. However, the proof will be in the pudding as to whether these reductions will continue and how the Bank of England assess the impact of the tariffs on our inflation.
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Harry Goodliffe
Director at HTG Mortgages
As swap rates tumble, UK mortgage borrowers may finally catch a break. With SONIA swap rates dropping and traders betting on three cuts this year, homeowners and first-time buyers may finally get a break. If they do happen, expect a flurry of property market activity as buyers rush to lock in better deals.
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Ken James
Director at Contractor Mortgage Services
Tarifmania may have delivered some unexpected rewards. Swaps on the 2-year deals especially have improved and this has been borne out with lenders announcing rate cuts this week. Traders potentially factoring in three rate cuts sounds very positive, but we will need to see if this happens as the market is in a constant flux at present. Trump's unstable behaviour means we should keep the shock absorbers in place when it comes to any future predictions.
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Aaron Strutt
Product and Communications Director at Trinity Financial
Many people already think the base rate is too high and that it is causing unnecessary economic pain. If the trade tariffs start to hit then it seems like the base rate will have to come down more to boost the economy. The lowest fixed rates are currently prices around 4% although lower deposit mortgages have got cheaper in recent months.
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Pete Mugleston
Mortgage Advisor & Managing Director at onlinemortgageadvisor.co.uk
Falling SONIA swap rates and expectations of multiple Bank of England rate cuts could be great news for the UK property market. If Trump’s tariffs slow global growth, prompting rate cuts, it may indirectly help UK buyers by lowering mortgage rates. First-time buyers and homeowners could benefit from improved affordability, potentially sparking a flurry of market activity, especially among those waiting for rates to fall. While his intentions may not have been to boost the UK housing market, Trump's actions could result in a ripple effect that could create opportunities for buyers and encourage lenders to reprice products more competitively in the months ahead.