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Thinking about buying a home? The idea of having a secure home to create a unique space is exciting. But when you consider the current unpredictability of the market, you might find yourself wondering when – or if – it's even achievable.
So, will mortgage rates ever go down? Let’s find out using the trusted expertise of the independent mortgage brokers here at RM Mortgage Solutions.
What Does the Current Mortgage Market Look Like?
Recent trends in the mortgage market have sparked a sense of hope for homeowners and potential buyers alike. Thanks to positive inflation data and the Bank of England's decision to hold the base rate for the third consecutive time in December, mortgage rates on a fixed rate basis have been on a downward trend – albeit very steadily – after months of eye-watering highs.
Additionally, high mortgage rates are encouraging lenders to re-evaluate their strategies. This has created the incentive and opportunity for lenders to consider reducing their rates, make alterations to their lending criteria and tweak their affordability calculators, which can be hugely beneficial for prospective buyers, those looking to refinance, and those exploring mortgage advice solutions. There’s also been a decline in swap rates, influencing the pricing of fixed-rate mortgage deals and producing the emergence of more competitive offerings in the market. These aspects all paint a very encouraging picture, but what exactly influences mortgage rates?
What Factors Influence Mortgage Rates?
Mortgage rates have a variety of influencing factors, including:
- Economic Indicators: Economic factors like employment rates and GDP growth strongly influence mortgage rates. When the economy is strong, interest rates tend to rise, affecting mortgage rates correspondingly. It also works in the opposite way - during economic recessions, rates may trend downwards. This is good news for those after a mortgage for bad credit.
- Central Bank Policies: Decisions made by central banks, like the Federal Reserve or the Bank of England, about interest rates have a direct impact on mortgage rates. Changes in these rates can influence borrowing costs which causes mortgage rates to fluctuate accordingly.
- Inflation Trends: Inflation also has a significant effect on mortgage rates. Higher inflation typically leads to higher interest rates to counteract its effects, which results in increased mortgage rates. Lower inflation may prompt a decrease in rates to stimulate borrowing and spending.
- Market Sentiment and Expectations: Mortgage rates can also be influenced by market sentiment and future expectations. If investors anticipate changes in the economy or policy shifts that could affect interest rates, it can lead to changes in mortgage rates in anticipation of those changes.
- Housing Market Conditions: The state of the housing market itself can impact mortgage rates. While high demand and robust market conditions might lead to higher rates due to increased competition among borrowers, a slower housing market can prompt lenders to lower rates to stimulate borrowing and buying.
What do Homebuyers or Refinancers Need to Consider?
For homebuyers eyeing the market, the potential decline in mortgage rates offers increased affordability and a much broader spectrum of housing choices. This shift is particularly beneficial for those with poor credit profiles, making it the ideal moment to enlist the help of mortgage advisors in Birmingham or anywhere else across the West Midlands. At RM Mortgage Solutions, our expertise caters for diverse credit scenarios, ensuring tailored mortgage advice solutions to match your unique financial needs.
Refinancers should consider the potential for substantial savings as rates show signs of decline. Seizing this opportunity could potentially lead to considerable long-term savings, and we’re here to make sure you strike the market at the perfect time to achieve your financial goals.
The RM Mortgage Solutions Approach
At RM Mortgage Solutions, our mortgage advice services are finely tuned to the changing pulse of the market, and cover everything from bad credit mortgages to drawdown lifetime mortgages. We don’t just help you understand market changes, we help you anticipate them. With a transparent approach, we’ll provide you with all the tools you need to make an informed decision and secure a lifelong home to fall in love with.
Although the future of mortgage rates looks like it may be getting brighter, the question of whether they will decrease in the near future is complex, and depends on a myriad of economic factors. Whatever the market looks like, we’re your trusted partner in finding the perfect mortgage on your terms. By translating confusing mortgage jargon into digestible information and guiding you with our unrivalled expertise, we’re committed to empowering you to navigate the market with confidence.
Finally achieve financial security – get in touch today.
Richard entered the mortgage market in 1987, working for various lenders before joining Shipways estate agents as a Mortgage Advisor. In January 2009 Richard set up RM Mortgage Solutions using the skills learnt in his previous roles to ensure that clients are provided with the best possible service. In discussing mortgages in plain English, Richard believes that his clients experience a better understanding of the mortgage proc.
In his spare time Richard enjoys trying new food experiences, walking, gets satisfaction from DIY (when it goes right!) and working out the perp in crime dramas.