Mortgage rates are currently in a “downward trend” and there’s “big expectations” of further drops in 2024, according to experts.
In the first week of the New Year, lenders are already slashing rates on mortgage products, including Halifax and Gen H.
Interest rates have been on the rise over the past year and a half which has resulted in over one million households paying more towards monthly mortgage repayments with many expected to pay more in 2024.
This is due to the Bank of England’s decision to raise the base rate multiple times to 5.25 per cent in an attempt to control inflation.
Mortgage rates are expected to drop in 2024
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With the central bank expected to keep interest rates at this level for the foreseeable future, the market is pricing in significant cuts later in the year.
However, some lenders have already started cutting rates in preparation of the Bank of England lowering the base rate.
This will likely benefit mortgage holders in the long run who will see their repayments drop along with interest rates.
Rachel Springall, a finance expert at Moneyfactscompare.co.uk, noted the current “downward trend” of mortgage rates coming into the New Year, and predicted lenders will likely be making cuts to mortgage rates in the coming weeks to “entice new customers”.
Speaking to GB News, Ms Springall explained: “As we are just in the first week of the New Year, there has not been a mass movement across multiple lenders to cut rates, but it is a typically subdued period for activity.
“There are big expectations for mortgage rates to fall in the coming weeks and any vigorous repricing can provide better deals for borrowers desperate to refinance.
“Seeking advice to go over the true cost package of any deal is vital so that consumers are not swayed by just the headline grabbing rates.”
Halifax is cutting rates by as much as 0.92 per cent, however, this specific deal is exclusive to existing customers.
Generation H announced further rate reductions of up to 0.67 per cent earlier today in another sign of the market’s trajectory.
According to Moneyfactscompare, the average two-year fixed rate LTV mortgage is sitting at 5.93 per cent, which is the lowest since summer 2023.
The Bank of England’s MPC is next set to meet to discuss interest rates on February 2, 2024.
