Mortgage Rates Rising
Mortgage Rates Rising – So, here’s the scoop: Despite crossing our fingers for a drop in the Bank of England base rate, it seems like some mortgage providers missed the memo and decided to hike up their interest rates instead. Yep, not the news homeowners were hoping for when they were dreaming of smaller mortgage payments dancing in their heads.
Picture this: Barclays, HSBC, Santander, and NatWest, all decided it was prime time to play the rate raising game. Now, we’re looking at an average 2-year fixed mortgage rate of 5.82% and a 5-year mortgage rate of 5.40%. Ouch, right? But hey, don’t panic just yet.
You see, the Bank of England is playing it cool, holding onto those interest rates like they’re the last piece of chocolate in the box. They’re saying inflation isn’t cooling down as fast as they’d like, so they’re keeping rates steady for now. It has been confirmed today that the US Federal reserve will keep interest rates on hold, and the B of E will follow suit.
According to the B of E crystal ball, they’re predicting a slight uptick in inflation down the road. And if that happens, they might be a bit hesitant to drop those rates too soon, which could mean we’re in for a bit of a wait before we see any relief. So, what’s a homeowner to do in the meantime?
Here at Nexus Investor we are still putting our money on a rate cut later this year, possibly between August and December. But remember, nothing in life is guaranteed – not even those cute puppy videos going viral, or cryptocurrency memes Doge, Shib or Wif going to the moon after the current pull backs, but more on that to follow later. However, if all goes as planned, we might see rates shimmying down to 4.75% by year-end.
Now, before you start hyperventilating into your mortgage statement, let’s talk about the bigger picture. Sure, these rate hikes might feel like a punch to the gut, especially when you’re staring down the barrel of thousands of extra pounds in mortgage payments. But guess what? You’re not alone in this boat.
Mortgage Arrears
According to UK Finance, the impact of mortgage rates rising has been causing a steady rise in mortgage arrears, with more and more folks struggling to keep up with those pesky payments. And let’s not forget about all the other bills that seem to have a knack for multiplying like rabbits – utilities, groceries, insurance, you name it.
But hey, it’s not all doom and gloom. Despite these Mortgage Rates rising, the housing market is still standing tall like a champ. Property prices are doing their little dance, with the average house price in the UK holding steady. But here’s the kicker: even small price increases can pack a punch when you’re talking about big bucks.
And hey, landlords aren’t immune to the chaos either. Some are even considering throwing in the towel and selling their rental properties. Can you blame them? Rising mortgage rates mean shrinking profits, and nobody has got time for that.
So, what’s the silver lining in all of this? Well, if you’re in the market for a new home, it might be worth pumping the brakes and waiting for things to settle down. Because let’s face it, nobody wants to jump into a sinking ship – especially when it’s their life savings on the line.
Sure, it might feel like we’re stuck in a waiting game, but hey, good things come to those who wait, right? So, sit tight, keep calm, and maybe binge-watch some home improvement shows in the meantime. Who knows, by the time rates drop, you might just be ready to tackle that dream home or investment head on.
