Mortgage Rates Surge as Inflation Takes Its Toll
Matthew Pigrome, Mortgage Principle at Mortgage321, Advises Homeowners to Act Swiftly.
Date: May 25, 2023
I hope this message finds you well. Today, I wanted to address a pressing matter that has been making waves in the housing market recently: the sudden surge in mortgage rates. As the Mortgage Principle at Mortgage321, I believe it is my duty to keep you informed and help you navigate these changing times.
Mortgage rates have experienced a notable increase due to the significant rise in the cost of living. Nationwide, the largest building society in Britain, recently announced a substantial rise of up to 0.45 percentage points on their mortgage interest rates. This move has prompted other prominent lenders such as Leeds Building Society, Virgin Money, Lloyds, and Halifax to follow suit and adjust their rates accordingly.
The driving force behind these rate adjustments is the higher-than-expected inflation we have witnessed in recent times. Inflation serves as a measure of the overall increase in prices, and in the past year alone, prices of essential commodities such as energy, food, alcohol, and tobacco have surged by 6.8%, reaching levels unseen since 1992.
Industry experts have emphasized that fixed mortgage rates, which remain unchanged for a specific period, are becoming more expensive. Lenders are preparing for anticipated higher borrowing costs in the future, leading to these rate hikes. Previously, the consensus was that interest rates would reach a peak of around 4.5%. However, revised predictions now suggest that the peak could be as high as 5.5% in the autumn.
In light of these developments, I strongly urge prospective homebuyers to act swiftly and seize the opportunity to secure a favorable mortgage deal. With rates on the rise, it may become increasingly challenging to find a better deal in the near future. Time is of the essence, and by taking prompt action, you can ensure you secure a mortgage solution that suits your needs.
Understandably, borrowers may find the current situation frustrating. After all, fixed mortgage rates were beginning to show signs of decline before this unexpected upward trend. Over the course of this month, the average two-year fixed-rate mortgage has risen from 5.26% to 5.34%, while the average five-year fixed rate has increased from 4.97% to 5.01%.
These rate adjustments have significant implications, particularly for the many homeowners who will see the end of their fixed-rate deals by 2024. The surge in home transactions during the pandemic, partially driven by the stamp duty holiday, has resulted in approximately 3.4 million homeowners being affected. In 2023 alone, half a million homeowners will be facing the conclusion of their two-year fixed-rate deals, potentially resulting in substantial increases in their monthly mortgage payments.
To tackle this situation, it is essential for homeowners to stay informed and make informed decisions about their mortgages. At Mortgage321, we are here to assist you every step of the way. Our team of experts is dedicated to helping you navigate the evolving market landscape and secure the best mortgage solution for your individual circumstances.
In conclusion, I would like to stress the urgency of the current situation. Mortgage rates are on the rise, driven by the impact of inflation, and it is crucial to act promptly to secure the best possible deal.
Reach out to Mortgage321 today, and let us guide you through the process of finding the right mortgage solution for you.
Remember, knowledge and timely action are the keys to securing your financial future.