Having peaked at over 6.00% in the latter stages of 2022, fixed-rate mortgages are showing signs of improving as we move into 2023. Interest rates are predicted to continue rising however so what impact is that likely to have on the mortgage rates offered by lenders and what’s the best way to make sure you secure a great deal?
Following historic growth over the past couple of years, UK house prices are starting to show signs that they may have plateaued, having fallen for the last 4 consecutive months. Mortgage approvals are also showing the same trend. So what is happening and how can we make sense of what the immediate future holds?
Put very simply, house prices are falling because the cost of a mortgage is increasing. Demand for property is diminishing because it’s more difficult for borrowers to demonstrate they can afford their new mortgage. Vendors are in turn reducing their property prices to accommodate the affordability challenges of borrowers.
In general, most commentators believe that rates will decline through 2023, even if the interest rates don’t. Some analysts expect fixed-rate mortgages to drop to sub 4.00% by next year.
Your choice of mortgage could have a significant impact on your current and future finances so it would be prudent to explore and consider various mortgage offerings before deciding on a rate control option and product term. Everyone’s circumstances are different and a solid discussion with a mortgage professional is now more important than ever. They will consider your personal circumstances ensuring that you can not only afford your mortgage today but more importantly, in the future too.
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