The Brexit vote last month brought with it much uncertainty, but the immediate outlook for those looking to buy a home or remortgage actually looks fairly bright.
Only a few months ago there were serious signs that interest rates were on the up, bringing with them more expensive mortgages and increases in monthly payments for homeowners across the country. But following the repercussions of the referendum result, the Governor of the Bank of England, Mark Carney, has strongly hinted that interest rates could head the other way.
Just days after the vote to leave the EU, Carney commented that “some monetary policy easing will likely be required over the summer”. Following this announcement, many analysts have predicted rates will be slashed to an all-time low of 0.25%, with 0% also being touted as a possibility, albeit an unlikely one.
Fixed deals more attractive
We won’t know for sure whether rates will fall until the the Monetary Policy Committee meets tomorrow, but lenders have already started to react by offering more attractive fixed-rate deals.
Barclays is just one of the big players to announce mortgages with lower rates, such as its two year fixed deal at 1.35% and five year fixed deal at 2.14%. These deals with Barclays have a £999 product fee, require a minimum 40% deposit, and are for remortgages only, but similar rate drops on deals for first-time buyers and home movers can be found.
Tracker rates increasing
Beware of lenders sneaking up their tracker rates, though. These mortgage deals, which rise and fall in line with the Bank of England base rate, are seized upon by buyers who believe rates are set to fall.
So when the Governor of the Bank of England all but confirms they will fall, lenders often make them less attractive. Birmingham Midshires, for example, is increasing rates on its tracker products by 0.2%, with Santander set to make similar changes.
A good time to buy?
In such uncertain times, no one can truly predict what will happen to interest rates and house prices, but at the moment it certainly looks like the the immediate future is bright for those looking to buy, remortgage, or move home.
As is always the case when rates are low, if you take a mortgage out today, chances are you’ll be faced with a rise in monthly payments at some point over its term. It pays to keep this in mind when working out what you can afford – be sure you’ll still be able to afford the monthly payments should rates start to head upwards.
Specialist advice for the self-employed
If you want to take advantage of the recent fall in mortgage rates, we can help you find the perfect deal. Our brokers at Crunch Mortgages specialise in securing mortgages for freelancers, contractors, and small business owners.
To find out more, get in touch with us today for your free consultation.