Short-term mortgage rates

[realdeals]

As the Bank of England announced a 0.5% reduction in UK base rates to the previous historic low of 0.25%, there were hopes of a reduction in mortgage rates. Short to medium term mortgage rates as always will be dictated to by the money markets which have tightened of late. The reduction in base rates will increase liquidity, and soften mortgage interest rates a little, but it is unlikely we will see any significant fall in light of the 0.5% base rate reduction.

However, borrowing rates are likely to remain low for UK property investors for some time to come - offering a degree of stability to the market.

 

[FWL]

I saw mention of some mortgage rates moving higher in the short term which would appear to be a reflection of money market trends. This must surely be a short-term issue because with interest rates now 0.25% in the UK, borrowing is cheap for the banks. Will interest rates go lower in short-term? Possibly but I doubt that mortgage rates will follow suit on a like-for-like basis.

 

[29DDE]

I really do not see Mortgage rates such as fixed rates falling at all. I’d say that’s the general consensus throughout the market.
Whilst rate changes will effect Lenders standard variable rates. Fixed rates can’t really fall much further, they simply wouldn’t be profitable enough for Lenders. Especially when considering the general market Risk associated with Coronavirus.
Think most Mortgage brokers seem to think this is the case.

At this rate, let’s just hope lenders return to lending about 80% loan to value and normality returns.

 

[PostBrexitInvestor]

Good point, perhaps the key to a short-term recovery in the property market is more focused on the LTV ratio as it is on the headline mortgage rate.

 

[Longterminvestor]

Great point @29DDE we are now at a point where reductions in interest rates have little or no impact on borrowing costs or indeed the fight to save the economy. Investment by investors and governments is the only way forward now.