The Times - Fixed mortgage rates buck the trend

by Aaron Strutt

Apr 01 2023

The Times reports that you can now get two, three, five and ten-year fixed mortgage rates that are lower than the Bank of England base rate.

Last week the base rate went up for the 11th time since December 2021, taking it from a record low of 0.1 per cent to a 14-year high of 4.25 per cent — but fixed mortgage rates are still falling.

Aaron Strutt from the broker Trinity Financial told The Times: “Lenders are making a play for cheaper two-year deals because everyone seems to be thinking, ‘Take a two-year deal to tide you over until rates come down.’ There has been a noticeable change in people taking two-year deals, more than five-year deals. It has flipped, and you can see why banks are offering cheaper rates.”

Aaron added: “Lenders have said to us before that they have improvements planned that would make it easier for people to borrow more, but that is not enough to drive borrowing. Everyone is so rate-driven that banks are having to cut rates more. Some of these deals could be loss leaders for the lenders.

“Nobody really knows for certain what rates will do, “ Strutt said. “People could just be taking a punt on two-year deals and hoping for the best.”