Fixed Rate Mortgages Fall Below 4%

February 7, 2023

The first five year fixed rate mortgage deals below 4% have become available for the first time in nearly six months. The Guardian reports that HSBC is leading the way for high street lenders, with a new product at a five year fixed rate of 3.99% for remortgaging customers.

The government’s disruptive mini-budget at the end of September last year spooked the financial markets and sent mortgage rates spiking above 6%. This has considerably slowed down the demand for new mortgages and house prices have started to fall for the first time since the start of the pandemic in June 2020.

However, confidence is gradually returning after most of the mini-budget pledges were reversed, and inflation is predicted to fall sooner than was expected. The UK economy is also in better shape than some experts forecast, with a shorter and milder recession expected rather than a deep and prolonged slump.

Rachel Springall, a spokeswoman for Moneyfacts.co.uk, said: “It’s encouraging to see fixed mortgage rates coming down for borrowers looking to secure a new deal.”

She added: “Due to the unpredictable nature of the mortgage arena, it is imperative that both those looking to purchase a property or who wish to refinance seek independent advice from a broker to navigate the options available to them.”

In a fast moving and complex mortgage market, consumers are advised to shop around and do some careful research before committing to a deal, whether they are first time buyers or seeking to remortgage. Better value products are coming onto the market every day, and it can take some time and effort to keep track of the most suitable deals.

An experienced mortgage advisor can be a great help at this time, because they will have established relationships with a comprehensive range of lenders, and can track down deals as soon as they become available.

It is especially important to seek professional advice if your financial track record is less than ideal. It is thought that up to a fifth of all adults in the UK have an adverse credit score. This can be due to anything from a missed parking ticket to a bankruptcy.

Any credit issues can affect your chances of borrowing money in the future, so it is important to deal with them as soon as possible. If you already have blips on your credit record, but need a mortgage deal in the near future, it may still be achievable.

There are specialist lenders who have more flexibility in their affordability requirements, and will look at your whole financial situation as well as your credit history. You are likely to pay an above average rate of interest to compensate for the extra risk you represent to the lender, but for some people, this may be the best route forwards.

If you are looking for a poor credit mortgage broker in the UK, please get in touch with us today.

Your home may be repossessed if you do not keep up with your mortgage repayments.

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