Category: Mortgage Advice

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Interest Rate Drop – What Does This Mean For Mortgages?

Mortgage Rates Drop – Is Now the Time to Secure Your Best Deal?

After years of turbulence in the housing and mortgage market, we may finally be seeing the first real signs of stability returning. Recent news that two-year fixed mortgage rates have fallen below five-year rates for the first time since 2022 has caused a bit of a stir—not just among property industry professionals, but also among homeowners, first-time buyers and landlords. At Benwell Daykin Estate Agents, we don’t just sell and let properties—we also offer clear, tailored mortgage advice to help you make sense of the numbers and secure the best possible deal. With the latest rate changes, many people are asking the same question: Should I act now?

What’s Changed in the Mortgage Market?

The Bank of England has made the decision to cut the base rate by 0.25 percentage points to 4%. This move was widely anticipated as inflationary pressures eased, but its impact on mortgage pricing has been swift. For the first time in nearly three years, two-year fixed rates have dipped below five-year deals. Historically, this has been the norm, but the upheaval following the 2022 mini-budget turned the market on its head, with lenders pricing shorter-term fixes higher due to uncertainty. Now, average two-year fixed rates sit around 5%, slightly lower than the 5.1% average for five-year terms. And for borrowers with a strong credit profile and good loan-to-value (LTV) ratio, some lenders are offering two-year rates as low as 3.8%. This shift suggests lenders are feeling more confident about the market’s direction—something we haven’t seen for a while.

Why This Matters for Homeowners and Buyers

For anyone on a variable or tracker mortgage, the benefits are immediate—monthly payments will likely fall in line with the base rate cut. But for those on fixed deals or looking to buy, the picture is a bit different. Here’s why the changes could be significant for you:

1. Opportunity for Lower Payments in the Short Term – A competitive two-year fix could mean lower monthly payments compared to sticking with your current deal or opting for a longer term at today’s rates.

2. Flexibility – If rates continue to drop in the coming years, being on a shorter fix allows you to refinance sooner and potentially secure an even better rate later.

3. Confidence Boost for Buyers – Lower rates can improve affordability calculations, meaning you might be able to borrow slightly more or widen your choice of properties.

A Word of Caution

While this is positive news, it’s important not to get caught up in “lowest rate fever” without looking at the bigger picture. Mortgage rates are only one part of the equation. You also need to consider arrangement fees, early repayment charges, flexibility to make overpayments, and whether your circumstances might change during the term. This is where speaking to a qualified mortgage adviser—someone who can look at your full financial situation—becomes invaluable. You can speak to someone today by calling 0115 990 2007.

The Benwell Daykin Approach to Mortgage Advice

At Benwell Daykin, we believe that mortgage advice should be personal, jargon-free and focused entirely on your best interests. Whether you’re a first-time buyer, remortgaging, or expanding your buy-to-let portfolio, we start by understanding you. Our free initial mortgage advice session is designed to: review your current deal and see if you could save money; explore the full range of mortgage products from across the market—not just one or two lenders; run affordability and repayment calculations tailored to your budget; highlight any hidden costs or restrictions in potential deals; and help you decide whether now’s the right time to fix, or if waiting could be wiser. We know that your mortgage is likely the biggest financial commitment you’ll ever make. That’s why our advisers take the time to guide you step-by-step, without pressuring you into a decision.

Why the Market Shift Feels Different This Time

Mortgage rates have had their ups and downs in recent years, but the fall we’re seeing now is being met with cautious optimism from industry experts. This is because it’s not just about cheaper borrowing—it’s about the return of market balance. For most of the past three years, the so-called “inverted curve” (where short-term rates were more expensive than longer ones) signalled lender uncertainty. Now, with two-year rates back below five-year deals, it reflects a belief that inflation will remain under control and the Bank of England won’t have to keep rates elevated for as long as feared. For homeowners, this could be the start of a more predictable, less volatile lending environment. And that’s good news whether you’re remortgaging this year or just starting to think about buying.

What This Means for First-Time Buyers

If you’re stepping onto the property ladder for the first time, these rate cuts could improve your affordability calculations, allowing you to borrow more or access a better deal. However, it’s important to remember that property prices, deposit requirements, and credit history still play a big role in what you can secure. That’s where our advisers can help you plan your move strategically—sometimes even months in advance—so when the right property comes up, you’re ready to act.

What This Means for Those Remortgaging

If your current deal ends within the next 6–12 months, now is the time to start exploring your options. Many lenders will allow you to lock in a new rate up to six months before your existing deal ends, which could protect you against future rate rises. Even if you’ve still got longer left on your fix, it’s worth checking whether an early switch could still save you money in the long run—especially if the rate difference is significant.

The Risk of Waiting Too Long

While rates have dropped, there’s no guarantee they will keep falling. Economic conditions, inflation data, and central bank policy can change quickly. If you’re in a position to secure a good rate now, it might be safer than holding out for something marginally better that may never materialise. Our role at Benwell Daykin is to help you weigh the potential benefits of acting now against the possible gains of waiting—backed by real market data and lender insights.

Why Choose Benwell Daykin for Mortgage Advice?

We work for you, not the banks – our recommendations are based solely on what’s right for your situation. Whole-of-market access – we can search deals from dozens of lenders, including smaller building societies and specialist providers. Clear, no-nonsense guidance – we explain the pros and cons in plain English. Free initial consultation – no cost, no obligation, just expert insight to help you make an informed choice. Local knowledge – based in Nottingham, we understand the property market in your area.

Next Steps – Take Control of Your Mortgage

If you’re a homeowner, first-time buyer, or landlord, this shift in rates could be your opportunity to get ahead of the curve. But the key is acting on accurate, personalised advice—not guesswork. Your mortgage shouldn’t keep you awake at night. Let us take the stress out of the process and help you find the deal that fits your life, not just your numbers.

Book your free initial mortgage advice session today with Benwell Daykin Estate Agents.

Call us on 0115 990 2007 or contact us here.

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Mortgage Relief at Last? Bank of England Slashes Interest Rates

Bank of England Cuts Interest Rates Amid Economic Stagnation

The Bank of England has announced its first interest rate cut of the year, reducing the base rate from 4.75% to 4.5%. The decision was made at the latest meeting of the Monetary Policy Committee (MPC), with all nine members voting in favour of a reduction. While seven members supported a 25-basis-point cut, two advocated for a more aggressive approach, favouring a 50-basis-point reduction.

This move was widely anticipated by financial markets and economists and is not unexpected.

Inflation Slows, Prompting Rate Cut

One of the key factors behind the decision was the latest inflation data, which showed a lower-than-expected increase in consumer prices. The annual inflation rate declined from 2.6% to 2.5%, defying expectations that it would remain steady or rise slightly to 2.7%. This unexpected slowdown provided the Bank of England with additional justification to lower borrowing costs, aiming to support economic growth without risking a surge in inflationary pressures.

Inflation has been a significant concern for policymakers in recent years, with persistent cost-of-living pressures impacting households and businesses alike. However, with inflation now edging closer to the Bank of England’s 2% target, the case for maintaining higher interest rates has weakened.

Economic Stagnation Increases Pressure

In addition to the inflation slowdown, recent economic data has painted a concerning picture of stagnation. UK gross domestic product (GDP) figures have shown minimal growth, putting further pressure on policymakers to stimulate the economy.

After contracting by 0.1% in both September and October, the economy recorded a marginal 0.1% expansion in November. While this slight growth prevented the UK from slipping into a technical recession, it did little to alleviate concerns over economic stagnation. The Bank of England’s rate cut is expected to provide some relief by reducing borrowing costs for businesses and consumers, potentially encouraging investment and spending.

Implications for the Property Market

The interest rate cut will have mixed implications for different groups within the economy. For mortgage holders, especially those on variable-rate or tracker mortgages, the reduction in the base rate could translate into lower monthly payments, easing financial pressures. Prospective homebuyers may also find mortgage rates becoming slightly more affordable, potentially boosting activity in the housing market.

Looking Ahead Within The Property Space

The Bank of England’s decision to cut interest rates marks a shift in monetary policy after a prolonged period of tightening aimed at controlling inflation. However, the big question now is whether this is just the beginning of a new cycle of rate cuts – and how it will shape the UK property market in the coming months.

If inflation continues to ease and economic conditions remain weak, the Bank may opt for further reductions later this year. This could provide more stability for homeowners and encourage prospective buyers to return to the market with renewed confidence. Mortgage lenders are likely to adjust their rates gradually, meaning homebuyers could see slightly better deals over time. However, the extent of these benefits will depend on how aggressively the Bank of England continues to cut rates.

One potential consequence of lower borrowing costs is increased demand for property. As mortgage rates become more attractive, more buyers may enter the market, driving up competition—especially in areas with a limited supply of housing. If demand rises significantly, house prices could begin to climb again after a period of relative stagnation. This would be good news for homeowners looking to sell but could create fresh affordability challenges for first-time buyers.

For those with existing mortgages, particularly those due to remortgage, lower interest rates offer a glimmer of hope after a challenging period of rising costs. However, fixed-rate mortgage deals are still being priced cautiously by lenders, meaning homeowners may not immediately see significant reductions in repayments. Borrowers should keep a close eye on the market to secure the best possible deals in the months ahead.

Investors in the buy-to-let sector will also be watching closely. With borrowing costs falling, landlords may feel more confident about expanding their portfolios, especially in high-demand rental areas. However, ongoing regulatory changes, tax implications, and concerns about rent controls could still pose challenges. The property market’s recovery will depend not just on interest rates but also on broader economic conditions, wage growth, and government policy.

Ultimately, while the Bank of England’s rate cut is a positive sign for homeowners and buyers, the full impact on the housing market will take time to unfold. Much will depend on whether this marks the start of a sustained downward trend in interest rates or a one-off adjustment. Either way, the property market looks set for an interesting year ahead.

Need advice?

Whether you’re looking to sell, buy or get a mortgage, Benwell Daykin can help. We’re one of the leading estate agencies in Nottingham.

Call us on 0115 990 2007.

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Bank of England Cuts Interest Rates Once More

For the second time this year, The Bank of England has cut interest rates. The base rate now stands at 4.75% which is the lowest point seen in 2024.

The yearly high stood at 5.25% which was then cut in August to 5%.

What does the mean for home owners?

If you have a property on a tracker mortgage then your payments are likely to change soon. Generally, when the interest rate is cut, monthly mortgage payments become cheaper. There are approximately 600,000 people in the UK who are on a tracker deal who may benefit from this.

First time buyers are also likely to benefit as mortgage repayments may become more affordable than they have been throughout the year.

Those who are on fixed mortgage deals and are coming to the end of theirs will see changes too. But monthly repayments are unlikely to drop to levels which have previously been seen over the last few years.

As an example, if you are coming to the end of a 5 year fixed deal, you are likely to be on a deal of around 2%. The current reported lowest deal is around 3.7% so you will still be paying more than you would have been previously.

If you’re looking to change mortgage deals then now is likely the right time. However, Benwell Daykin estate agents would suggest waiting a couple of weeks to let the dust settle. Many banks or lenders won’t be changing their rates immediately following this news.

Need mortgage advice? Get in touch with our recommended mortgage broker.

If you’re looking to move home since this news then we also offer free property valuations.

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Will My Mortgage Rate Drop After Bank of England Announcement?

Last week, the Bank of England cut the base interest rate from 5.25 percent to 5.0 per cent.

As a result of this cut, mortgage lenders quickly sprung into action, reducing some of their rates by a small amount.

This was good news for many home owners but wasn’t exactly the large decrease anyone was hoping for.

But what does it mean for the coming months? Will mortgage rates remain fairly high or will lenders start to drop rates further?

Mortgage rates Autumn 2024

The good news is that today, some lenders have slightly reduced mortgage rates further.

HSBC and Barclays are the latest to cut the interest on their deals. HSBC cut their best deal by 0.19 per cent and Barclays by 0.2 per cent.

The hope is that now more lenders will follow suit and rates should drop further.

Interestingly, the average still stands at around 5.74 per cent for a two year fixed.

With these new rates, someone with a £200,000 mortgage repaying over 25 years could expect to pay £1,050 a month with HSBC and £1,038 with Barclays.

The market average would be around £1,257.

Now let’s focus on Ruddington with a current average house price of £353,157. Those with a 20% deposit would be likely to pay £1,483 per month with the new HSBC rate and £1,466 with Barclays.

Mortgage rates in 2025

Many people are asking Benwell Daykin what this means for mortgage rates in 2025 and beyond.

Whilst we don’t have a crystal ball, we really don’t expect percentage rates to drop to those we have seen for the last few years at around 2 per cent.

Having said this, we would expect a further base rate cut from the Bank of England by the end of this year, if not into early next.

This would mean rates would drop slightly again, but not to the historic lows seen before.

Need mortgage advice?

This information has been gathered from our own research and does not constitute as mortgage advice. Please always speak to a qualified mortgage advisor before making any financial decision relating to your home. You can contact us on 0115 990 2007 to get mortgage advice today.

Are you coming to the end of your fixed term mortgage deal? Now would be the perfect time to see how much money you can save compared to July.

 

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When Will Mortgage Rates Drop?

Many people across the UK are asking when will mortgage rates will drop?

For those who already own a property, the prospect of remortgaging may seem daunting since rates increased in 2023.

Those looking to move to a new property may also be waiting for mortgage rates to drop to make their next purchase just that bit more affordable.

When will mortgage rates drop?

The good news is that they are starting to drop already.

It was reported this week that rates dropped below 4% at Nationwide, the UK’s largest building society. The rate is 3.84% at the time of writing.

This is the cheapest deal provided by the company for 8 months and is also significantly under the Bank of England’s base interest rate.

This is only available currently to those who are remortgaging although it’s still not bad news for first time buyers; the rate offered to those looking to take a first step onto the property ladder is only 0.01% higher at 3.85%.

Both these products are 5 year fixed rate deals and are significantly lower than the average offered by other lenders which stood at 5.2% this week.

Will other mortgage lenders follow suit?

Although some lenders are following the trend of sub 4% products, some are actually increasing.

Santander recently increased their rates on some mortgage products by 0.2% for remortgages.

This though is still well below the average last summer when rates stood at around 6%.

Should you wait for rates to drop further?

Unfortunately, we don’t have a crystal ball which will tell us the future relating to mortgage rates.

As we’ve seen this week, rates can go up and down and fluctuate daily.

For now, we feel that rates are likely to stick at around this mark for the next few months.

The best advice we can give at Benwell Daykin is always talk to our qualified mortgage broker who will be able to advise you in more detail.

Products can vary depending on your own circumstances too, so it’s always a good idea to compare the whole of the market with a broker and find out which products match your criteria.

For some, this will now be the best time to buy a new property as rates are now becoming more affordable.

 

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Will Mortgage Rates Come Down in 2024?

2023 saw a huge hike in mortgage rates, largely due to the Bank of England increasing the base interest rate to 5.25%.

According to Zoopla, fixed mortgage rates peaked at 6.44% which was a stark contrast to the historic lows.

But will mortgage rates continue to rise in 2024 or will they begin to drop?

The good news is that mortgage rates are already starting to come down. News reports in early January 2024 suggest that mortgage lenders are already cutting rates.

One of the biggest UK lenders, Halifax, has cut their mortgage interest rates by close to one percentage point and mortgage brokers are expecting other lenders to now follow suit.

It is important to note however that not all mortgage products will be reduced, so it’s wise to speak to a mortgage broker to understand which ones have now become more affordable for you.

How mortgage rates are dropping at the start of 2024

Towards the end of 2023, you’d be lucky to get a mortgage rate below 5%. Since January 2024, 5 year fixed rate deals are now being offered at below 4%. However, this rate is only available currently for a remortgage with a 60% loan-to-value.

Media outlets are reporting that a 2 year fixed deal should soon fall below 4.5%.

As we continue to move through the year, Benwell Daykin expect these below 5% rates will move to other mortgage products too, as well as other lenders.

What does this mean for the housing market?

When rates decrease, buyers tend to have better affordability. This means they can look to make offers on properties which they previously may not have been able to afford.

As such, we expect house prices to remain at their current levels, if not increase slightly.

Houses should begin to sell faster too, as increased affordability means more people will be looking to purchase property.

Key things to remember as mortgage rates drop

Remember to always speak to a mortgage broker before making a decision on which mortgage product to go for. Benwell Daykin offers free initial mortgage advice which can help you to decide which product is best for you based on your own circumstances.

Fixed rates are a great way to lock in lower interest rates but be aware these rates could go down further. If you lock in for a long period of time then you will be missing out on these further drops. Of course, rates could rise too which would obviously act in your favour!

Remember also to look out for fees. Some lenders offer lower rates but include a fee when signing up for the mortgage.

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Mortgage Interest Rates: What Does It Mean For You?

On Thursday 3rd August 2023, the Bank of England raised interest rates by another quarter of a percent. This has now taken the base rate to 5.25 per cent and is the 14th consecutive hike. This is also the highest interest rate since March 2008, the year of the financial crisis.

So what does this mean for you?

Why are interest rate rises happening?

By rising interest rates, the Bank of England is hoping to bring down inflation. Inflation is very high right now which is contributing to our cost of living crisis. By increasing interest rates, the BoE are hoping that many will stop spending and save money instead. This, in turn, should hopefully lower the price of goods.

What will happen to mortgage payments?

The interest rate increase can be a troubling time for some. For instance, there are over 1.4 million people in the UK who are on a variable rate residential mortgage. This means that their payments fluctuate along with interest rates.

Some home owners could now see hundreds of pounds added to their monthly payments which, during a cost of living crisis, is definitely not ideal.

What can you do to ease any pressure?

There are several things you can do to ease pressure if your mortgage bills are rising. The first is talk to a qualified mortgage broker. Whilst this blog can offer guidance, every financial situation is different. You can talk to a qualified broker for free by calling our offices on 0115 990 2007.

You can also talk to your lender. Some are now offering a switch to interest-only products. This means you only pay the interest on your mortgage every month, rather than the full payment. Whilst this does lower your monthly costs, be aware that you won’t be making payments towards your home, only to the lender’s fees. This will likely extend the term of your mortgage.

Moving to a fixed-rate mortgage could also help. If you are on a variable rate where your payments fluctuate, you may be financially better off by fixing in the rate for 2, 5 or 10 years. Again, talk to a qualified mortgage broker to see which option is best for you.

The good news

It’s not all doom and gloom, however. Santander, for example, actually cut their mortgage rates ahead of the base rate rise. So there are deals still to be had if you talk to a qualified mortgage broker.

It may also be easier for you to purchase a property right now. House prices have dipped slightly which means you may be able to afford that property of your dreams.

Looking to see how much your property is currently worth? Benwell Daykin can offer free property valuations.

To conclude

Although much of this news can appear daunting, there are ways to ease the pressures.

Benwell Daykin are here 6 days a week to offer any advice, whether property or mortgage related.

You can speak to us by calling 0115 990 2007 or by using our contact page.

Also why not pop into our office for a chat and a coffee? We’re located at 12 High Street, Ruddington.

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The Impact of Interest Rate Rises in 2023

mortgage rate rises 2023

May 2023 marked a significant turning point for the United Kingdom’s financial landscape, as the Bank of England implemented an interest rate rise for the first time in several years. This move reflects the evolving economic conditions and aims to balance the needs of consumers, businesses, and the overall stability of the economy. In this blog post, we will explore the implications of interest rate rises in the UK in May 2023 and discuss how individuals and businesses can navigate these changes.

  1. The rationale behind the interest rate rise:

The Bank of England’s decision to raise interest rates in May 2023 was driven by several factors. One of the primary reasons was the need to curb inflationary pressures, which had been gradually building up due to increased consumer spending, rising energy costs, and supply chain disruptions. By raising interest rates, the central bank aimed to reduce the pace of spending, cooling down the economy and reining in inflation.

  1. Impact on consumers:

For consumers, the interest rate rise means an increase in borrowing costs. Mortgages, personal loans, and credit card debts are directly influenced by interest rates. As rates rise, monthly payments on variable rate mortgages are likely to increase, potentially impacting household budgets. Individuals should review their finances, consider fixed-rate mortgage options, and explore opportunities for debt consolidation or refinancing to mitigate the impact of rising interest rates.

  1. Impact on businesses:

Businesses will also feel the effects of interest rate rises. The cost of borrowing will increase, which may deter investment and expansion plans. Higher interest rates can also affect consumer spending habits, potentially impacting the sales and profitability of businesses, particularly those in sectors sensitive to interest rate changes. Companies should assess their cash flow, review their financing strategies, and explore alternative sources of funding to adapt to the new interest rate environment.

  1. Investing wisely:

As interest rates rise, savers may benefit from higher returns on their deposits. Traditional savings accounts and fixed-term deposits may become more attractive as they offer better interest rates. However, investors should also diversify their portfolios and consider other investment options, such as stocks, bonds, or real estate, which can provide opportunities for growth and offset the impact of rising interest rates.

  1. Overall economic outlook:

While interest rate rises can cause short-term adjustments and challenges, they are often seen as a positive sign for the economy. Higher interest rates can help maintain price stability, encourage savings, and prevent the buildup of excessive debt. However, it is important to strike a delicate balance to avoid stifling economic growth. The Bank of England will closely monitor economic indicators to assess the impact of interest rate rises and adjust policies accordingly.

The interest rate rise implemented by the Bank of England in May 2023 signifies a shift in the UK’s economic landscape. Consumers, businesses, and investors need to adapt to this changing environment by carefully reviewing their financial strategies, considering alternative financing options, and exploring diversified investment portfolios. While initial adjustments may be challenging, the long-term benefits of a stable and balanced economy can outweigh the short-term impacts. By staying informed and proactive, individuals and businesses can navigate these interest rate rises and position themselves for financial success in the evolving economic climate.

How Interest Rates Impact Mortgages

In addition to the broader implications of interest rate rises in May 2023, it is essential to understand how these changes will specifically impact mortgage rates in the UK. Mortgage rates are directly influenced by the Bank of England‘s base rate, which serves as a benchmark for lending institutions. As Estate Agents in Nottingham, Benwell Daykin breaks this information down.

  1. Variable rate mortgages:

For homeowners with variable rate mortgages, the interest rate rise will lead to an increase in their monthly mortgage payments. Variable rate mortgages are typically linked to the base rate, meaning that any increase in the base rate will result in higher mortgage rates. Borrowers should be prepared for potential adjustments in their budget and consider the impact on their monthly mortgage affordability.

  1. Fixed rate mortgages:

Homeowners with fixed rate mortgages will generally not be immediately affected by the interest rate rise. Fixed rate mortgages offer a predetermined interest rate for a specific period, usually two to five years. However, as fixed-rate mortgage deals expire, borrowers will need to renew their mortgage or switch to a new lender. When doing so, they will likely face higher interest rates than those available during previous years. It is important for homeowners to review their options and assess whether it is advantageous to lock in a new fixed-rate deal or explore other mortgage products.

  1. Remortgaging and new home buyers:

The interest rate rise may lead to increased remortgaging activity as homeowners seek to secure lower rates or more favourable terms before rates rise further. This surge in demand for remortgaging could potentially lead to increased competition among lenders, offering borrowers a range of mortgage deals to choose from. However, borrowers should carefully consider the associated costs, such as arrangement fees and early repayment charges, to determine if remortgaging is financially beneficial.

When buying property, new home buyers entering the market after May 2023 may encounter higher mortgage rates compared to previous years. It is crucial for prospective buyers to factor in these increased rates when calculating their affordability and budgeting for homeownership.

  1. Expert advice and planning:

Given the complexities and potential financial impact of interest rate rises on mortgage rates, seeking expert advice is strongly recommended. Mortgage brokers or financial advisors can provide guidance on navigating the changing landscape, exploring different mortgage options, and identifying the most suitable approach based on individual circumstances.

You can talk to our recommended mortgage broker for free by calling us on 0115 990 2007.

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Bank of England Interest Rate Cut

The Bank of England has today announced that interest rates will be cut from 0.75 per cent to 0.25 per cent. This has been introduced as an emergency measure to keep the economy moving, following the outbreak of coronavirus.

This news means that borrowing costs are down to the lowest level in history.

History of interest rates

Interest rates were increased in August 2018 from 0.5 per cent to 0.75 per cent. This announcement is the first cut since August 2016.

From 2008 to 2016, interest rates were at a steady 0.5 per cent.

Mortgage rates

Mortgage rates are likely to change slightly although this will not be immediate.

If you are on a Variable Rate mortgage then you may soon see a reduction in your monthly mortgage payments. If you are looking for a new mortgage deal then you may have to wait some time for these changes to happen.

It is unlikely that there will be significant drops in monthly mortgage payments as interest rates were already at a very low level.