- With inflation running high, the Bank of England increased its base rate to 1.25% in June, with another 0.5 percentage point rise forecast before the end of 2022 and potential for a further 0.25 percentage point rise in 2023.
- The typical margin between mortgage rates and the bank rate (1.5 percentage points over the last year) suggests the average new lending mortgage rates will be over 3% by the end of 2022.
- The vast majority of new mortgage borrowers are on fixed rates (representing 92% of new loans over the last 5 years) offering protection from rising payments, at least until the fixed term expires.
- House prices are largely driven by what people can borrow and at what cost, so with rising rates this does start to drive affordability the wrong way.
- Source: Dataloft, Bank of England HM Treasury Consensus Forecasts June 2022
Get in touch for mortgage advice and get that fixed rate locked in…
WhatsApp – 029 2132 1470
Call – 029 2168 0006
Direct chat – click on the message button
Working with property professionals for over 20 years providing advice and services to all property investors.