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"Based on swap rate activity today, we are coming to the end of recent fixed rate reductions"

ended 19. February 2025

Swap rates, which are used to price fixed rate mortgages, have risen since this morning's inflation print. Newspage asked brokers whether they expect the rate cuts of the past fortnight or so to be reversed as a result. Their views are below.

5 responses from the Newspage community

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Harps Garcha
Director at Brooklyns Financial
Wednesday's unexpected rise in inflation has tempered predicted base rate cuts in 2025. With swap rates reacting sharply, recent mortgage rate reductions may be short-lived. Those looking to secure new a fixed rate for their mortgage should consider acting sooner rather than later, before lenders adjust rates in response to the shifting market.
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Justin Moy
Managing Director at EHF Mortgages
Some movement in Swap rates was inevitable given that the chances of further base rate cuts has reduced with Wednesday's jump in inflation. It's likely that rates will continue to fall over the coming months, but just at a slower rate or just postponed until much later in the year. The Bank of England will struggle to justify to itself base rate cuts whilst inflation continues to increase, as the effect of the Autumn budget starts to kick in over the next few months. The Chancellor has a self-inflicted wound with no dressing to help it heal.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
With inflation rising more than expected on the latest print, expectations around further Bank of England base rate cuts have been tempered. Based on swap rate activity today, we are coming to the end of recent fixed rate reductions. It's likely some of the best priced deals currently available will be pulled shortly. So buyers or remortgage clients should act quickly to secure a rate.
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Babek Ismayil
CEO at homebuying platform OneDome
The markets already appear to be reacting to this morning's higher than expected inflation number. Over the past week or two we've seen lenders competing quite aggressively on rates but the cuts may well be reversed if the current upwards trajectory in swaps continues. This is not the news borrowers wanted to hear.
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Elliott Culley
Director at Switch Mortgage Finance
Swap rates will rise as a result of the inflation figure coming in higher than expected. We have been here before, the markets are volatile and the direction of travel can change in an instant. Mortgage holders need to continue being resilient and prepare to ensure they do not lose out. The Bank of England are likely to change stance and delay any further base rate cuts until later in the year.