Mortgage rates for those with low loan to value (LTV) ratios are being offered at or near 4.0% interest rates while the Bank of England’s standard base interest rate is at 5.0%. Having been cut for the first time since March 2020 by the Monetary Policy Committee (MPC) from 5.25%, the expectation alone led lenders to offer better rates on mortgages and remortgages without the decision of the MPC. Many borrowers were no doubt motivated by the decision of the MPC on 1 August and could have been totally unaware that lenders had made their own cuts weeks and days prior. Now the question is are these the best interest rates that will be offered in 2024 or will rates go lower?

Experts are divided as to whether another rate cut will occur by the MPC. They are even less capable of predicting the individual actions of lenders. 

As for the base rate, there will be two inflation reports offered up before the next MPC meeting in September. A lower inflation rate could be thought to trigger another slash to the base rate, while if it increases it could threaten the committee to reverse their recent decision, but it has been noted that an increase in the inflation rate is expected for the last part of the year. Therefore, a reversal is not really a concern, but if it does increase then it probably will hold off another rate cut in the near future.

There are others expecting one or even two rate cuts by the end of the year. However, those that are looking for such votes by the MPC are of the minority.

The forecasts and outlooks and expectations by and of experts can be frustrating for borrowers looking for answers. Yet, the information is important for home buyers and homeowners. This is especially true due to the many months of double-digit inflation that while declining stubbornly held on and has impacted household budgets and still does. For while inflation may have reached the target rate of 2.0% set by the Bank, the relief is slow to trickly down to consumers.

So, what is a borrower to do? The answer is to understand options, avoid the pitfalls of waiting too long or jumping in too fast, and look to make the best strategy decision for their own unique needs. 

Home buyers have optimistic options available currently. There is a higher supply of properties on the market currently and that offers a more competitive market for buyers. There are more properties for not only first-time home buyers but home movers, as well. It has been reported that there is strong demand for larger type homes for growing families, and this will mean in turn that those buyers will be putting their starter homes on the market which are desired by first-time home buyers.

Some of those homes could be up to date with the latest energy savings heating systems, or newly painted, and have other improvements and upgrades. In that case, the home buyer will be able to move into their choice of home ready to enjoy it and simply maintain the property. Other properties going on the market might need the improvements and upgrades and a home buyer will come upon a less expensive property they can better afford while planning to do the improvements and upgrades as they can on their own time schedule or as they can save to complete the projects. For many home buyers, the opportunity to purchase a home they can personalize with improvements they choose is their idea of the perfect dream home.

There will be many types of buyers coming back to the housing market now that there are more properties for sale, and because of lower borrowing costs. First time home buyers, home movers, and landlords new and experienced will be taking advantage of the changes in interest rates from lenders. 

Those with particularly good credit histories, or large deposits, will find they are offered the best interest rate deals as the risk in lending is less for these borrowers, but all mortgages are more attractive than they were only months ago. 

Homeowners chasing their own savings and opportunities will find offers that meet their own unique needs. Some will simply be in search of a fixed rate deal at the end of their mortgage term to escape a more expensive and riskier lender’s standard variable rate (SVR). A homeowner might be in search of a remortgage to release some of their built-up equity into cash to use to improve their property or to consolidate debt or fund an overdue holiday for the family. There are others seeking a remortgage deal with a longer term, or perhaps they are interested in a tracker loan versus their lender’s SVR.

Rather than worry about expectations or forecasts that could or could not materialize, borrowers should consider their own needs and their own unique requirements to stabilize their finances, offer relief, or perhaps offer peace of mind. 

Starting a search online for a remortgage could offer valuable information for a homeowner. They could discover what deals are available and what each offer would do for them. A few minutes online at the website of a remortgage broker might offer many quotes from a variety of lenders and possibly even exclusive deals. Homeowners could also go from website to website of lenders to gather quotes. Gathering quotes is a quick and easy process and offers quick and easy answers to most questions homeowners have as to how a remortgage could help.

If the MPC does indeed do another rate cut this year, it will likely be another small one of 0.25% taking the rate to 4.75%, which may be where lender rates are hovering or below already. There is no need to wait when perhaps the very best deal for an individual borrower, rather they are a home buyer or a homeowner, is already waiting even if it isn’t the lowest rate on the market.