Monday January 8, 2024

As we embark on the promising year of 2024, the mortgage market has found a newfound stability, creating an optimistic atmosphere. Fixed rates are anticipated to continue their descent, offering homeowners a positive outlook for the coming months.
November’s inflation figures, surpassing expectations at 3.9%, down from October’s 4.6%, hint at a favourable trend. If inflation continues to decrease, there is optimism that the Bank of England will trim the Bank Rate, which has remained at 5.25% since August. While the markets project this adjustment in the upcoming Spring, it could initiate a gradual decline in rates extending into 2025.
In the year ahead, over 1.5 million homeowners are expected to reach the end of fixed-rate mortgage deals. January marks a bustling period for re-mortgagers, with 192,000 fixed deals expiring, setting the tone for an active year. Another surge is predicted in the spring, with 420,000 deals concluding between March and May.
Despite rates trickling down in recent weeks, remortgaging poses a challenge for those who opted for a two-year deal in 2021, when average rates were well below 3%. Presently, the average two-year fixed rate stands at 5.95%, and the five-year fix is marginally cheaper at 5.55%, according to analyst Moneyfacts.
There is a positive shift in the mortgage landscape as the Bank of England has concluded its 14 consecutive raises in the central interest rate, maintaining it at 5.25% since August. Lenders, having passed on the majority of Bank Rate increases to mortgage customers, are now influenced by other market factors, such as swap rates, contributing to falling mortgage rates.
For those seeking the most favourable interest rates, Moneyfacts suggests options such as Virgin Money for a two-year fix at 4.59% and Generation Home for a five-year fix at 3.99%. It’s essential to consider the overall cost of the deal, including fees, when evaluating the best mortgage option.
Looking ahead, industry experts predict a positive trajectory, with rates continuing to decrease throughout the new year. Lenders are expected to release more competitive fixed rates, with best buys potentially approaching 4%. The positive sentiment is shared by industry professionals, who anticipate a proactive and competitive lending environment in the coming year.
To secure the best rate for a mortgage, borrowers are encouraged to increase their equity, as a lower loan-to-value ratio and a larger deposit can unlock more favourable rates. Additionally, considering overpayment or exploring offset mortgages can provide financial advantages.
As we navigate through 2024, the mortgage market exhibits signs of resilience and adaptability. With a positive outlook, homeowners and prospective buyers can make informed decisions to benefit from the evolving landscape.