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What’s Happening With Mortgage Interest Rates? Your June 2024 Homebuying & Remortgaging Update

There’s been so much going on with mortgage interest rates over the last few months, impacting homebuyers, those needing to remortgage and your local Beewise mortgage advisors! 

 

From rate reductions at the start of the year to rate increases a few months later, it feels like the mortgage market is far from predictable.

 

To add to that, a general election has now been announced for 4th July 2024 – but what will that mean for mortgage interest rates?

 

As mortgage experts, Beewise stay on top of lenders’ interest rate updates and the wider financial market, giving us insight on reasons for current changes and future predictions.

 

And, as with all our mortgage advice, whether you’re looking to buy your first home, move house, or remortgage, we’re here to pass on our knowledge in a jargon-free way.

 

Read on to find out where the market’s at right now, what’s predicted for the future, and how that could affect you if you’re planning on taking out a new mortgage.

 

Whether you’re coming to the end of your fixed rate or deciding whether now’s the right time to buy, Beewise are always here to guide you, saving you stress, time and money.

 

To chat to your local Beewise mortgage advisor, click here to arrange a call or ring 01934 204841. Or, scroll down for the latest on mortgage interest rates and the general mortgage market.


Mortgage interest rates in 2024

The beginning of 2024 saw interest rates for some lower loan-to-value mortgages drop below 4% for the first time since the government’s 2022 Autumn Statement.

 

This was great news for those looking to get a mortgage, and had a positive effect on the market in general after a long period of mortgage interest rate increases.

 

So why the change? Well, inflation rates – the rate at which the cost of goods and services rise – were reducing as predicted, which gave the wider financial markets more confidence in the economy.

 

This, in part, reduced the rates at which mortgage lenders secure their money, and these savings were therefore passed onto to their borrowers.

 

 

With things seemingly back on track, it was predicted the Bank of England could reduce the base rate as early as May this year, as opposed to later in the year as originally forecast.

 

When the base rate comes down, interest rates tend to drop on saving and borrowing. Lenders might not change mortgage interest rates by the same amount, but they usually decrease them to reflect the money they saving.

 

But, the base rate stayed at 5.25% after the Bank of England meeting in May, the same figure it’s been since August 2023.

 

The Bank of England use the base rate as a tool to help bring down increasing prices, and therefore reduce the rate of inflation – ideally back to the government’s target 2%.

 

With inflation and the UK economy not performing as they’d want it to just yet, they decided dropping the base rate now could impact them reaching that target.

 

The wider money markets reacted in turn, increasing their rates of borrowing, which led to lenders having to follow suit and increase their interest rates for new mortgages.

 

What’s happening to mortgage rates right now?

A good question! At present rates are fluctuating as lenders adjust their own costs and figures accordingly.

 

But, mortgage interest rates will always change to a certain extent as lenders will reduce their rates to encourage new customers if they want more business, or increase them to price themselves slightly higher if they’re at capacity.


It was hoped rates would settle over the next month or so, but then on 22nd May the current Prime Minister, Rishi Sunak, announced a general election on 4th July 2024.

 

So, what does that mean for mortgage interest rates? Well, in the run-up to an election, uncertainty about political changes can impact to the financial market, meaning lenders might be more cautious.

 

This could lead to them delaying significant rate reductions, regardless of the Bank of England’s decisions, until the economic outlook is clearer.

 

If your fixed rate mortgage is coming to an end this year, we’d recommend contacting us now. Your local Beewise mortgage advisor can secure a new deal 6 months in advance, plus we’ll keep an eye on the market and switch it if rates reduce.

 

To find out predictions for mortgage rates in the second half of 2024, scroll down. But, if you’re looking to buy that doesn’t mean you should wait! Read on to find out why.

 

Is now the right time to buy a house?

No matter what’s happening in the mortgage and housing market, we’d always recommend talking your specific situation through with Beewise – call 01934 204 841 to chat to your local advisor today.

 

Like most things in life, there’s never a perfect time to buy your first home or move! But, here’s 5 reasons why now could be right for you… 

 

·       Mortgage interest rate predictions don’t always go to plan, and you won’t necessarily make huge savings by waiting.

 

·       When interest rates are especially low, demand for properties can be higher as more people look to buy, so asking prices tend to rise. 

 

·       If you need extra space, be it another bedroom, that wish-list garage or a garden, make the move! The housing market has picked up, so it’s as good a time as any to act.

 

·       Renting? The sooner you buy, the sooner you start paying off your own mortgage – even the highest interest rate would still give you more equity more than rent!

 

·       Saving more towards a deposit can make sense, but do you need to? You could buy your dream home right now!

 

If you’re thinking of buying, knowing how much you can borrow means you can make an informed decision, so contact Beewise today and we’ll calculate your options. 

 

Plus we’ll get you a mortgage in principle, work out potential monthly payment options, advise on other buying costs you might incur, and more.

 

Contact us to arrange an initial call so you can choose what’s really right for you.

 

When should you remortgage if your fixed rate is ending?

As we mentioned before, there isn’t a clear prediction of what’ll happen with mortgage interest rates in the run up to the general election.

 

If your fixed rate is due to end soon, you might be thinking of waiting to remortgage in the hope of getting a better interest rate.

 

There are 3 important reasons why you should talk to your local Beewise mortgage advisor about securing a new rate sooner rather than later though:

 

·       Reserving a new rate up to 6 months in advance means you can prevent stress by budgeting for potential payment increases now.


Until your new mortgage goes into effect we’ll also keep an eye on market changes, switching you to a new deal if a more suitable rate comes up.

 

·       The remortgage process can take a couple of months, depending on the legal work required.

 

Leaving it till the end of your current deal means you could switch to the lender’s standard variable rate if the new one doesn’t go through in time, paying considerably more a month.

 

·       Staying on the lender’s standard variable rate and hoping mortgage deals reduce may seem like a good option, but there’s no guarantee lender’s variable rates won’t increase.

 

Plus, most high street lenders’ standard variable rates are between 8-9% so you’ll usually save by switching to a new deal now. Your Beewise advisor will happily calculate that for you!

 

We can also look at a wider range of products, from tracker mortgages that follow the Bank of England base rate to deals with no early repayment charges.


That way, you could secure a rate now and potentially switch to a fixed deal later in the year. As mortgage experts, we’ll work out all the options available so you’re fully informed.


Long term predictions for 2024 & 2025 mortgage interest rates

Election aside, the longer-term predictions for interest rates are generally positive, but experts are forecasting that significant drops won’t happen for a while.

 

If inflation – the rate at which prices are rising – continues to fall, it’s said the Bank of England could cut the base rate as soon as June.

 

The next inflation figure will be announced on 19th June, with their next meeting due on the following day. But as we mentioned before, with the election on the 4th July we may not see much change.

 

Potentially we could see the mortgage market settle depending on the election outcome, but those holding out for lower mortgage rates in 2024 may be disappointed.

 

Current market outlooks say they’re unlikely to reduce much further this year, even if inflation and the base rate come down – there would need to be significant reductions to see any major changes.

 

Longer term, economists expect the Bank of England to bring the base rate down to 3.5% by the end of 2025, which would roughly see mortgage interest rates in and around the 4%+ range. 

 

But, rates will usually depend on how much of the property price you’re borrowing – the loan-to-value.

 

If your loan-to-value is higher – say, a first time buyer putting down a 5% deposit – your interest rate will generally be higher than someone remortgaging just 50% of the property value.

 

As the mortgage market changes all the time, the best way to keep on top of any latest news is to follow Beewise on Instagram and Facebook.

 

We’ll always share updates on our socials, and keep you informed with helpful advice and expert guidance.

 

Next steps? Contact your local Beewise advisor!

Now you know how invaluable we are when it comes to mortgages, give us a call and we’ll get you started on your journey.

 

Whether you’re ready to start looking now, want an idea of what to work towards, or need to remortgage in the next 6 months, we’ll take you through your options step by step with award-winning advice and 5 star service!

 

To get in touch with your local Beewise FS Ltd advisor, click here or call 01934 204841. And, click here to check out our 295 5 star customer testimonials.

 

With evening and weekend appointments available, we’re here to make mortgages and protection easy to understand.

 

 

Looking for more expert advice? Check out these other helpful blog posts!

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