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Where next for SWAPs?

ended 24. June 2024

With SWAP rates edging down, on Friday MPowered Mortgages announced the rates below. Where are you expecting SWAPs to head during the rest of the summer and what could be the trigger that sees them travel further south? Equally, what factors could reverse the current trend? Any thoughts on the direction of travel, send them across.

3 responses from the Newspage community

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Ben Perks
Managing Director at Orchard Financial Advisers
It's great to see swaps slowly sliding southward. They don’t need to plummet dramatically, but stability is key and a gradual descent is good for that. The key thing is that they don’t rocket back up and, with the turbulence of an election, this is clearly a concern. Competitive products from MPowered are appreciated and hopefully they are paving the way for more lenders to follow.
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Riz Malik
Independent Financial Adviser at R3 Wealth
We are expecting lenders to reprice downwards over the next few weeks given improving market conditions. Major movements are now likely around the next set of inflation data or on the 1st August when the Bank of England tells us if they are going to cut rates for the first time since 2020, or continue teasing us.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
In essence SWAP's are the financial markets guess at where the Bank of England base rate will be at future points in time. For a while now SWAP's, and so retail fixed mortgage rates, have been below base rate as the market expects the Bank to lower it. But, as the wait grows ever longer the positivity that saw those initial falls in mortgage rates is ebbing, some lenders have increased prices as SWAPs gentle rose and uncertainty around the election began to creep in. The good news is that these adjustments have been small and gradual changes as the markets view ebbs and flows depending on the data being released, there are none of the big dramatic moves that can and do cause havoc for markets, lenders, brokers, and borrowers. With luck we will see SWAPs fall further as market sentiment solidifies around the most likely election result and the Bank drops ever bigger hints that a reduction could be coming later in the year.