Will mortgage rates come down following next week’s Monetary Policy Committee (MPC) meeting? Read on for expert rate predictions and a general market outlook.
Just last month, the Bank of England reduced the Base Rate (BBR) for the first time in four years. After being held at 5.25% for nearly a year, BBR now sits at 5%.
Many attribute this reduction to ongoing inflation stability and the end of the general election period. Furthermore, the overall money market outlook remained strong as SWAP rates continued to settle. However, the announcement surprised many industry experts, so what can we expect from next week’s MPC meeting?
Mortgage Rate Predictions
Ahead of Labour’s October budget, which is widely expected to be financially tough on everyone, including landlords, it seems unlikely that the Bank of England will look to move BBR next week. Although SWAP rates continue to soften gently week-on-week, it’s more likely that the second BBR cut will be on the 2nd of November, depending on the aftermath of Rachel Reeves’ fiscal plans.
However, what happens across the pond with the Federal Reserve will also influence the MPC’s decision. With the US bank expected to announce cuts on the 17th of September, the Bank of England may be pushed to reduce BBR to keep exchange rates stable. Whilst UK money market volatility is unlikely, several political and international factors will play a part in next week’s decision.
What this means for mortgage rates
As 2-year and 5-year SWAP rates continue on their downward trajectory, with both currently under 4% at the time of writing, we have seen mortgage lenders reduce product pricing across the board. Despite this, no one expects to see the historically competitive post-pandemic mortgage rate pricing return; more, rates are softening, and there are plenty of options for landlords to consider.
Whether the Base Rate comes down next week or stays at 5%, we expect lenders to continue making small reductions to rates to generate new business activity. As many landlords hold off fixing a new deal in the hopes that lower rates become available, those waiting and potentially paying high lender SVRs must now review their mortgage options with a broker.
The best way to see what types of rates you could access is to use our FREE buy to let mortgage rate calculator. With our bespoke sourcing system and whole-of-market access, you can search through all rates to find the right deal for you.
Once you have a better idea of the mortgage rates on offer, our expert brokers can complete a complimentary portfolio review to find potential new ways to save money.
