Mortgage rates to remain competitive for the time being

With the increasing chances of a rate cut this year in the United States, there will be less scope for the Bank of England to move in the opposite direction. The Bank of England also has to navigate its way through Brexit, but as other central banks around the world take their cue from the Federal Reserve in the US, the interest rate backdrop is becoming more benign.

Indeed, the UK five-year swap rate (the mechanism through which lenders can acquire fixed-priced mortgage funding) has fallen sharply since the start of May in response to this change.

So we are in an environment where rates are likely to remain stable for a period of time.

Inevitably, this means mortgage rates will remain competitive.

However, the outlook for UK politics is less stable, which means the arguments for fixing your mortgage rate now become more compelling. Faced with the possibility of more volatility over the next several months, fixing your rate would give you peace of mind.

If you would like to review your borrowing options or have any questions about the mortgage market, please get in touch.