“What are mortgage rates in 2024 going to look like?” As trusted and knowledgeable mortgage advisors, this is a question we are currently getting asked a fair amount. Considering that 2022 and 2023 brought about an incredible 13 individual base rate increases, which is making people look forward to 2024, especially for moving home, new house purchases or remortgaging.
Our team of expert mortgage advisors have been looking ahead to 2024 to predict and advise about what could happen with mortgage rates within the next 12 months.
- What Is A Mortgage Rate?
- Will Mortgage Rates Rise Or Fall In 2024?
- 2nd November 2024 Base Rate Announcement
- What Does This Mean For Mortgaging & Remortgaging?
What Is A Mortgage Rate?
Before we delve into the facts and figures, it’s important to highlight what exactly a mortgage rate is and why as a homeowner or first time buyer, it’s important to know and understand the impact your mortgage rate has on your monthly payments.
A mortgage rate is the interest rate added to your mortgage repayments. This will be an additional fee charged on top of your mortgage loan from your lender. This will be accumulated together, to generate your monthly repayments to your mortgage provider. Mortgage rates will differ depending on your mortgage type, find out more about the different mortgage types in our blog post, ‘a complete guide to UK mortgage types’.
Last month, the Bank of England defied expectations and rather than raising the interest rate for the 15th time in a row, they decided to keep it at 5.25%, the August rate. (Find out more about the August base rate change in our blog post, ‘August 2023 interest base rate rising how can this impact you?’)
According to Capital Economics, the Bank of England will be looking to cut the base rate to around 3% by late 2025, taking it back to be lower than it was in December 2022, when it was 3.5%.
The Bank of England has said that if inflation rates (the rate at which the cost of items increases) decrease, the base rate will also decrease with it. The bank predicts that the base rate may continue to fall to 5% base rate by the end of 2023 and keep falling throughout 2024.
The next Bank of England base rate announcement is due on the 2nd of November.
Will Mortgage Rates Rise Or Fall In 2024?
In August 2023 the base rate increased to 5.25%, the highest level in 15 years, but with all of these increases, are we coming closer to a reduced rate soon?
Money To The Masses, one of the UK’s leading independent personal finance websites, has predicted the base rate will rise as high as 5.5% in 2024, before seeing it fall in the years following. However, this predicted peak of 5.5% is already lower than the previously assumed 6% prediction just a few months ago.
Highlighting that in this current financial market, it is anyone’s guess as to whether mortgage rates will rise or fall in 2024, it is worth noting that the financial market is still predicting and preparing that the Bank of England base rate will rise to 5.5% by the start of 2024.
2nd November 2024 Base Rate Announcement
On the 2nd of November 2024, The Bank of England announced that the base rate will be staying at a 15-year high rate of 5.25%, following the last increase in August. Six members of the Bank of England’s monetary policy committee (those who choose whether to increase or decrease the rate) voted to hold the rate, while three voted to increase it.
While the rate stays the same for now, the Bank of England predicts that there will be changes in the future, with the aim to decrease it back to the target rate of 2% in the future, when this will be, we are unsure of at the moment.
What Does This Mean For Mortgaging & Remortgaging?
At The Levels Financial, we know that the constantly increasing and changing predictions within the financial industry can be taxing and stressful. This is why our team of expert and knowledgeable mortgage advisors will do all of the research for you.
When you choose The Levels Financial for your mortgage commitments, we will always endeavour to take the stress out of moving home, remortgaging or applying for your first time buyer mortgage, and will work with you to find the right mortgage rate for you.
While we can’t tell you with 100% certainty about what will happen in the mortgage market in the coming year, we will be by your side and on hand to help you at a time that best suits your schedule. Contact the team today at admin@thelevelsfinancial.co.uk or call us at 01458 772 040 and we will be happy to help with any of your mortgage or remortgaging concerns.
Important information:
You may have to pay an early repayment charge to your existing lender if you remortgage.
If you do not keep up with your remortgage repayments your home may be repossessed.
A fee may be included for mortgage advice. The actual remortgage amount you pay will differ depending on your circumstances. Fees can be up to 1%, but typically a fee is 0.3% of the borrowed amount.
