Mortgage rates starting to drop – Despite continued Bank of England rate increases

Clever Mortgages, who arrange mortgages for all types of customers, be that with a poor or excellent credit score, are seeing lenders now decreasing their mortgage interest rates.

Halifax, the UK’s biggest mortgage lender, has announced that on the 11^th August, they will reduce rates on selected mortgage products. Some products will drop 71 basis points.

As an example, a 5 year fixed rate of 6.10% would drop to 5.39%.

For a £100,000 mortgage over 20 years, this would be a monthly payment difference of £722 to £681 a £41 per month. At nearly £500 per year, this is a welcome difference with other costs of living increased or increasing.

Halifax decreasing their rates, follows on from other big lenders doing the same, the likes of HSBC, TSB and Nationwide have already decreased some rates.

Following the announcement from the Bank of England that their interest rate is, yet again, increasing, there were reports that mortgage rates and payments would also be increasing.  However, this isn’t the full picture.

Whilst it’s true that the Bank of England increased their rate to 5.25% (August 3rd, 2023) and this will impact tracker mortgages, it won’t impact all mortgages and in fact some rates are reducing.

The majority of mortgages start with an initial product period, if action isn’t taken at the end of this period, home owners will revert to the lenders Standard Variable Rate (SVR). These rates have continued to increase and are now on average above 7%.  Imagine the substantial impact on your mortgage payments if you move from say a 2% interest rate to 7%!

But, now you could get a lower fixed interest rate!

Homeowners should start considering their options, at least 6 months before the end of an existing deal, to secure a suitable solution prior to moving to the lender’s SVR. They could save a considerable amount by reviewing their mortgage at the right time.