Exploring the current mortgage market

Looking at current mortgage market trends and what it could mean for you.

As a homeowner or property investor, a question you might be asking yourself is how mortgage rates might be changing throughout 2023. If you’re looking to buy or nearing the end of your current mortgage deal, you’ll be keen to know and understand what to expect.

However, before delving into what may occur within the mortgage market, it’s worth taking a brief look back at 2022 to understand what has led to the current mortgage trends.

Looking back on 2022

Three increases to the Bank of England’s base rate from September to December 2022 (bringing the rate to 3.5% by the end of the year) led to major mortgage lenders increasing their rates in response to the uncertainty in the economy. For those not on a fixed deal, these higher rates had a knock on effect of higher monthly mortgage payments for many customers.^

Exploring the current market

A new year and more stability in Government seems to have brought new confidence to the mortgage market as higher rates immediately after the mini-budget now seem to be levelling off, with lots of lenders reducing their fixed deals*. The average cost of fixed rate mortgages has since been gradually decreasing as lenders become more competitive in their offerings in order to attract new customers. The Bank of England Governor, Andrew Bailey recently reported ‘we have seen that new fixed-rate mortgages have come down from the highs in October’ and that this correction would ‘benefit people seeking mortgages’.*

The average rate for a 2-year fixed mortgage dropped to 5.53% (correct at 20th January 2023) and the average for a 5-year fixed mortgage rate fell to 5.3% (saving the homeowner approximately £115 to £204 a month on a £200,000 loan)*. When you compare this with average Standard Variable Rates of 6.64%, it really highlights the importance of seeking out advice to ensure when you remortgage, you are getting the very best deal for your circumstances**.

What to know what great mortgage deals are available to you?

Bank of England Interest Rate changes (2nd February 2023)

The Bank of England increased the base rate for the tenth consecutive time on 2nd February by 0.5% (bringing the rate up to 4%).† Although this increase will impact on some customer’s monthly mortgage repayments, some analysts are predicting that the base rate ‘peak’ will be lower in 2023 than previous industry forecasts.^ Data from Moneyfacts also suggests that despite base rate rises, availability of mortgage products have improved and fixed rates will fall further in 2023 in order for lenders to entice new business.**

What’s next?

With all of this in mind, in order to understand the different types of mortgages on offer, the continuing changes in mortgage rates and mortgage lenders becoming more competitive, talking to a mortgage adviser is more important than ever to help find the right deal for you.

Speak to a mortgage adviser

Correct at the time of publishing – 09/02/23


ALL MORTGAGES ARE SUBJECT TO STATUS AND LENDER CRITERIA.

MOST BUY TO LET MORTGAGES ARE NOT REGULATED.

A LIFETIME FEE MAY BE PAYABLE UPON MORTGAGE APPLICATION AS WELL AS AN ADMINISTRATION FEE. THE TOTAL FEE PAYABLE WILL DEPEND ON YOUR CIRCUMSTANCES. YOUR MORTGAGE CONSULTANT WILL EXPLAIN ANY FEES APPLICABLE IN YOUR INITIAL APPOINTMENT.


YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. YOU MAY HAVE TO PAY AN EARLY REPAYMENT CHARGE TO YOUR EXISTING LENDER IF YOU RE-MORTGAGE.

Countrywide Mortgage Services and Countrywide Insurance Services are trading names of Countrywide Principal Services Ltd which is authorised and regulated by the Financial Conduct Authority (Firm Registration Number 301684). Registered Office: Countrywide House, 6 Caldecotte Lake Business Park, Caldecotte Lake Drive, Milton Keynes, MK7 8JT. Registered in England no. 01707341. MS/CW6601/01.23