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When could a 2 start with a 4?

ended 20. September 2023

Following this morning’s positive inflation data, when do you think we could see the return of a sub-5% 2-year fixed rate? This week if the Bank of England pauses rate increases or signals that a 0.25% hike may be the last?

3 responses from the Newspage community

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Editor
Darryl Dhoffer
Founder at The Mortgage Geezer
For 2-year fixed rates, anything under 5% before the end of October would be extremely unlikely but not impossible. If the expected 0.25% percentage rise for September is the last, then we may see 2-year SWAP rates react favourably. All eyes will be on the Monetary Policy Committee meeting notes, to give us a steer about what lies ahead with rates.
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Steven Hargreaves
Mortgage and Protection Adviser at The Mortgage Co
For the first time in quite a while, we are seeing some real positives.
Interest rates have been steadily reducing over the past six weeks. Lenders need to lend, have to lend, and will need to cut rates to attract new business. They are aware the period up to the end of the year is traditionally busy, and they need to fill their order books. We are hoping that, following the latest inflation figures, the Bank of England will pause increasing the base rate on Thursday. Again this would be seen as a huge positive, that rates are perhaps levelling, under control, and an end is in sight. For now, 2-year fixed rates still look high in comparison to the longer 5- and 10-year fixed rates. However, if the confidence continues it may see 2-year deals fall below 5%, which would be encouraging. 2-year Swap rates have reduced from 5.24% to 5.05% this week, which is extremely positive. Watch this space.
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Gary Bush
Financial Adviser at MortgageShop.com
We are hoping that the round of fixed rate decreases and that, all being well, we could before year-end see a 2-year fix starting with a 4.