UK mortgage rates - where next?

What will happen next with UK mortgage rates, will they continue to fall or gradually begin to creep up?

Earlier this year UK mortgage rates started to increase reflecting rising funding costs. Market predictions at the time were grim and mortgage-holders and would-be buyers were warned by the BoE that rates were expected to climb higher.

Shortly after the BoE's warning lenders gained access cheaper funding.

Both swap rates and the Libor began to fall which meant mortgage rates fell too. Adding to this the government in conjunction with the BoE announced the funding for lending scheme which reduced rates further.

UK mortgage rates began to fall significantly and the expectation is rates could fall further, especially if the BoE were to cut the base rate. The IMF has already called on the Bank to lower the already historically low base rate. The BoE chairman has advised that currently it has no intention to lower it further, however should the funding for lending scheme fail then this situation may change.

Market analysts are already predicting that the base rate could drop by the end of the year meaning home-owners could benefit further.

Competition between lenders has resulted in lower rates. Lenders keen to attract new business are not just reducing rates, many are introducing mortgage incentives such as cashback, fee legal work and free valuations.

If you are looking for the lowest UK mortgage rates on offer you are advised to call Deal Direct.

One of our impartial advisers will make a complete review of the market to find the right mortgage to suit your needs.

Call Deal Direct for a low rate offer.