‘How low can mortgage rates go?’ is a question we’re often asked. Invariably, the answer is ‘not that much lower’. For this reason, we feel that anybody thinking about remortgaging or who might be coming to the end of their existing mortgage, and therefore facing the standard variable mortgage (SVR), should act fast and take advantage of what are unusually low mortgage rates.
One major lender recently announced a two-year fixed rate mortgage for those who are remortgaging – at a staggering 0.84%*. Just when you think it couldn’t get any lower, it does.
However, it’s not possible for UK mortgage rates to remain this low on a long-term basis. And it’s certainly not sustainable for mortgage rates to continually shrink as they have been doing of late. And that’s okay, because nothing lasts forever. Yet, if your time to remortgage has come, or if it’s imminent, then you don’t want to be on the other side of the curve when rates start to increase.
On the back of a global pandemic, everything seems a little out of the ordinary. There remains a sense that up is down, down is up, and that the dust kicked up over the last 18 months is still settling. That fact that property prices are booming at the same time that some of the best mortgage deals to ever be seen (in many people’s lifetimes, at least) seem to launch on what feels like a daily basis perhaps reflects this.
We’re a team of Guildford mortgage brokers that’s been in business for 16 years. And in those years since 2005, it’s fair to say that 2020/21 has been one of the best in terms of having access to cheap mortgages.
But it’s important to remember that the dust will settle and mortgage rates will rise. So, perhaps the more pertinent question to ask is not ‘how low can mortgage rates go?’ but ‘when will interest rates rise?’.
That we can’t answer. However, what we can do is advise those who need to (and yes, if you are facing the SVR then you really do need to) remortgage to think about using a mortgage broker to find the best mortgage deal in the UK right now.
Looking to remortgage or unsure when your current mortgage deal ends? Contact the Complete Mortgages team on 01483 238280 or email info@complete-mortgages.co.uk and let us help you find the best mortgage rates available.
* Example: 0.84% fixed to 30/11/2023 (3.1% APRC)
Example based on a property value of £500,000 and deposit of £200,000. Mortgage is £300,000 over a term of 25 years on a Capital and Interest basis. Arrangement fee £995 and can be added to the loan. Initial rate of 0.84% applies until 30/11/2023 and then reverts to SVR (currently 3.59%). The overall cost for comparison is 3.1% APRC. Monthly payment £1,109.027. Total amount payable over 25 years is £434,484.
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