What’s happening to UK mortgage rates?
Mortgage rates have experienced fluctuations since December 2021, primarily due to the Bank of England's consecutive base rate increases. These rate hikes were triggered by concerns over unplanned government borrowing following last year's mini-budget, causing the markets to panic. As a result, the average interest rate soared to a 14-year high, peaking at 6.55% in October 2022. However, despite the Bank of England's subsequent base rate raises, mortgage rates started to decline from their October peak. The market was reassured by the appointment of Rishi Sunak as prime minister, Jeremy Hunt as chancellor, and a significant reversal of Liz Truss' problematic economic policies. Nevertheless, in May 2023, analysts began raising their expectations for the Bank of England base rate, given the persistence of higher-than-expected inflation. In June, the Bank of England increased the base rate by 0.5 percentage points to 5%, and it is now projected to reach 5.75% by the end of this year. These revised forecasts have prompted a renewed rise in mortgage rates. For a personalised review of your mortgage requirements to understand the impact of the interest rate changes on you, please reach out to one of our expert mortgage brokers using the link https://www.mortgageladder.com/mortgageapply