Nick T.’s Post

Inflation has fallen to the Bank of England’s target level of 2%, but as widely expected, Base Rate was held yesterday at 5.25%. The big question is, now that inflation has fallen, when will Base Rate fall, and what impact has it had on Mortgage rates?! This article suggests The Bank of England has opened the door to cutting interest rates in August. Will it happen? So much can of course change, but what does it mean for your Mortgage? So many clients have paused their borrowing, waiting for a base rate drop to come, but the reality is that Mortgage fixed rates are not directly linked to the current Base Rate. But more so link to “Swap Rates”, which in short are more of a prediction as to what the average base rate will be over 2 or 5 years for example. Which is partly why 2 year fixed rate Mortgages have generally been more higher than 5 year fixed rate Mortgages, with the expection that Base Rate will over the next few years. What are swap rates? Swap rates are the interest rates that banks use to swap, or exchange, fixed-rate payments for variable-rate payments. This is important for mortgage lenders because it allows them to lock in a fixed interest rate for a period of time, even though they may be funding their mortgages with variable-rate deposits. How do swap rates affect mortgage rates? When swap rates rise, mortgage rates tend to follow. This is because lenders need to pay more to borrow money, and they pass those higher costs on to borrowers in the form of higher mortgage rates. What are the factors that affect swap rates? There are a number of factors that can affect swap rates, including: The Bank of England base rate: The Bank of England base rate is the interest rate that banks charge each other for short-term loans. When the base rate rises, swap rates tend to rise as well. Inflation: Inflation is a measure of how much prices are rising in the economy. When inflation rises, it is expected that interest rates will rise in the future, which can lead to higher swap rates and hence higher fixed rates available for Mortgages. When swap rates fall, as they have been in the last few days its an indication that lenders may look to lower their fixed rate Mortgages Whilst we can’t predict future rates, we can help you understand the options available to you today, and help you find the best mortgage for your needs. Your home may be repossessed if you do not keep up repayments on your Mortgage

On 1 August 2024, the Bank of England cut interest rates for the first time since 2020, easing some pressure on households and businesses facing high mortgage costs. This narrow 5-4 decision lowers the base rate to 5%, but challenges persist as rates are unlikely to return to previous lows. With the government’s Budget announcement on 30 October approaching, it's crucial to consider how these changes will affect mortgages, savings, and economic growth. Read the full article at MoneyWeek: https://lnkd.in/eEvn29AG Katie Williams #BankOfEngland #UKEconomy #InterestRates

Finally! The Bank of England has cut rates to 5%, the first drop since March 2020 although it was by a narrow 5-4 vote by the Monetary Policy Committee. Will this bring back consumer confidence which is critical to the growth of the Uk economy? A number of banks have already cut their mortgage rates and this will help those who may be coming off their fixed rates this year, especially if there are further cuts before December. However, the key will be the impact on inflation given the balancing act between cutting the cost of borrowing to boost spending and keeping inflation rates at the current 2% target level. We'll find out more over the next few months as to the direction of travel for the UK economy I'm sure but this is hopefully the start of something good for the UK economy after two years of high inflation, high interest rates and low consumer and business confidence. https://lnkd.in/e-ZHT-gT

The Bank of England has cut the cost of borrowing, reducing headline interest rates from 5% to 4.75% – a move that was widely anticipated. It is the second interest rate cut this year. 📰🔎

Interest rate freeze: what you need to know! 👇 The Bank of England has opted to hold interest rates at 5.25% for the seventh month in a row, in a decision they described as "finely balanced." ⚖️ What does this mean for you? For homeowners and potential buyers, this period of high interest rates can be challenging. However, with the prospect of future rate cuts, there is room for optimism. Lower inflation and the potential for decreasing interest rates can create more favorable conditions for mortgages in the near future. Is a rate cut coming? There's a chance! The Bank is waiting for more data to confirm if inflation is truly under control. The Guardian predict a possible cut in August. ⏳ At Q Financial Services, we understand that navigating the complexities of the UK mortgage market can be challenging. Our team of qualified advisors stays up-to-date on the latest rate movements and can help you find the right mortgage product for your individual needs. #QFinancialServices #Telford #Wellington #Shropshire #YourShropshireBasedFinancialProvider #Telfordmortgages #ShropshireCommercialFinance #LoveWellington

The Bank of England’s recent decision to cut interest rates from 5.25% to 5% represents a significant moment in its monetary policy, aimed at addressing the current economic conditions. This reduction is designed to provide some relief to borrowers, especially those with tracker and variable-rate mortgages, by lowering their monthly payments. While this move could boost consumer confidence and spending, its overall impact might be limited for those with fixed-rate mortgages, who will not see immediate benefits and could face higher costs once their deals expire. Governor Andrew Bailey’s remarks underscore the Bank’s cautious approach to managing inflation. Although the rate cut signals a response to the recent decrease in inflation, core inflation—excluding volatile items like food and energy—remains high. This indicates persistent underlying price pressures that could counteract the benefits of the rate cut. The Bank’s careful stance reflects its ongoing commitment to balancing economic stimulation with inflation control. Financial markets are optimistic about further rate cuts, with expectations of another reduction in November, influenced by the upcoming Labour government budget. This anticipation may impact borrowing costs and consumer behavior in the near term. The rate cut has sparked varied reactions from politicians and the public. While it offers some relief, particularly for those struggling with high mortgage payments, it does not fully address the consequences of previous higher rates. The debate continues over the effects of public sector pay rises on inflation and the broader economic outlook, with differing opinions on the government’s effectiveness in handling these challenges. Overall, the rate cut is a strategic move to alleviate financial pressures for some borrowers but must be seen within the broader context of the Bank of England’s ongoing efforts to manage inflation and support economic stability. https://lnkd.in/ePKmenAT

Bank of England Cuts Base Rate Again!📉 In 2024, the Bank of England Base Rate has been cut a total of 0.5% (5.25% - 4.75%). What does this mean for property Investors? Lower Borrowing Costs: As the base rate decreases, mortgage rates tend to follow suit, making borrowing more attractive. This can lead to higher cash flow and better ROI making property investment more appealing than other asset classes. Increased Purchasing Power: Lower monthly payments means increased purchasing power for property investors. Boosted Demand: Higher demand for both residential and rental properties can lead to better property growth and investment opportunities. Are you ready to take advantage of the cuts in the base rate?

The Bank of England has cut the cost of borrowing, reducing headline interest rates from 5% to 4.75% – a move that was widely anticipated. It is the second interest rate cut this year. 📰🔎

The Bank of England has cut the cost of borrowing, reducing headline interest rates from 5% to 4.75% – a move that was widely anticipated. It is the second interest rate cut this year. 📰🔎

Is the Bank of England's interest rate cut a sign of opportunity or a warning for investors? The Bank has made a significant move by cutting interest rates for the first time since 2020. The key rate has been lowered to 5%. This will have implications for investors, as cash returns will fall, and other asset classes would be expected to rise in time as more liquidity is added to the monetary system. This rate cut comes after a close vote among policymakers. While this move may provide relief to mortgage holders and businesses facing the rising cost of borrowing, it also signals a cautious approach, with future cuts expected to be gradual. While potentially beneficial in some areas, this rate cut may also raise concerns about the underlying health of the economy. Do you see it as an opportunity to diversify or a moment to exercise caution?