The move by Gen H should set the tone for more cuts in the new year, assuming money market swap rates – which largely determine the pricing of new fixed deals – remain at current levels, Hollingworth says. Launched by a small lender called Gen H, it has a rate of 3.99%, is for loans up to 60% loan-to-value (LTV) and carries a £999 fee. The drop fuelled money market expectations that the Bank of England could cut interest rates as early as spring 2024, and already a five-year fixed-rate mortgage deal priced at below 4% is on sale for the first time since May. It has been a tough year for many homebuyers and those looking to remortgage, but a bigger-than-expected drop in UK inflation in November has intensified the downwards pressure on the cost of borrowing. The new year “could start with a bang” on the mortgage front, says David Hollingworth from the broker firm L&C Mortgages. But in the meantime, what can you expect from mortgage rates and the housing market? We asked some experts for their forecasts.
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