Mortgage rates climbed throughout 2022, as the Bank of England put up interest rates in their battle to bring down inflation.

Those mortgage rates certainly rocketed skyward following Kwasi Kwarteng’s emergency mini-Budget on September 23^rd.

However, mortgage experts now say that they have stabilised since Jeremy Hunt’s Autumn Statement on November 17^th.

Fresh data provided by Moneyfacts shows that the average five-year fixed mortgage rate has dropped below 6% for the first time in seven weeks.

Average five-year mortgage rates hit 5.95% on Tuesday, November 22^nd, and remained at the same rate the following day. This was down from a high of 6.51% on October 20th.

Even though Christmas is fast approaching, and all the organisation and frantic activity that often brings, people who paused their home purchasing plans because of the rates rise, or put the idea of refinancing their mortgage on the back burner while costs were so high, may now be scrutinising the latest deals on offer.

At least 100,000 people per month are coming to the end of their current mortgage deal and currently face a jump in their monthly repayments. Some of them will have steep rises to contend with.

The Bank of England (BOE) has warned that they may act again and raise interest rates if necessary, to get inflation on a downward trajectory. A statement from the BOE read: “We know that raising interest rates means many people will face higher borrowing costs. And some businesses will face higher loan rates. But we need to act to lower inflation. Low and stable inflation is vital for a healthy economy, where people can plan for the future and where hard-earned money keeps its value.”

The next interest rate decision from the Bank of England is due on Thursday, December 15th.

When it comes to the type of mortgage product to take, Lifetime Mortgage Adviser Scott Kershaw (pictured below) says he asks clients this important question: “Are you in a position where if the interest rates rise you can afford the repayments?”

Scott adds: “The Autumn Statement did appear to help stabilise the rates and so if people are coming to the end of their current deals then it is a good idea to review their mortgage needs.

“I’m also making clients aware – inspired by consumer champion Martin Lewis – that if a fixed rate is right for you now, then that is what’s important. If rates are to decrease in the future and you are still fixed in, then it always bears remembering that the decision you made was the right choice for you at the time.

“If people are currently struggling to make the payments on their mortgage, then there is a possibility of extending the mortgage term, in order to lower the monthly payments. However, you need to be fully aware that by doing this more interest will be paid on the mortgage.

“Anyone struggling to make their mortgage payments needs to speak to their existing lender as soon as possible. The lender wants to help people meet their repayments and will be able to discuss the options available.

“If you’ve secured a mortgage rate, but that deal hasn’t yet started, it’s worth checking now if you can get a cheaper rate. It may be that new mortgages are now lower than they have been in the last few weeks.

“If your new deal has already started, you’ll almost certainly be charged to cancel.”

• If you need any help and guidance with your mortgage needs then please get in touch with Scott, telephone: 01226 206800.
• A mortgage is a key part of your overall financial plan. It is important that you have full understanding of your personal finances. Lifetime can help with this. We have spent years helping people make better informed decisions with their money. Our financial wellbeing service gives people the confidence to take full control of their financial situation, make future plans, and live their best life.