MSE News: What's happening to mortgage rates following the mini-budget reversal – MSE's analysis

MSE_Kit

Interest rates on mortgages could start falling in the next few weeks, following the Government's reversal of its mini-budget which has helped calm the financial markets. If you're looking to get a new mortgage deal soon, here's our latest analysis. 

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'What's happening to mortgage rates following the mini-budget reversal - MSE's analysis'

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housebuyer143

The problem is no lender wants to be the first one to reduce their rates because they'll be inundated with business. Many lenders already have more applications than they can handle. As long as they are getting applications at 6% there is no incentive to bring them down.

london21

The banks do not drop rates as quick as they increase it.

Next BOE announcement not until 3rd of November I am surprised rates already 5/6%+

The mini budget hasn’t helped.

kingstreet

Notification of rate reductions on new Barclays semi-exclusives today;-

The mortgage market continues to move at a fast pace and we’re pleased to confirm we’re reducing the 2 and 5 year semi exclusive Purchase and Remortgage fixed rates we launched yesterday. These products, detailed below, will be available to you from tomorrow, Thursday 20th October, 2022.

Semi exclusive purchase products - reduced

• 6.07% 2 Year Fixed, £899 product fee, 85% LTV, Loans £5k - £2m -  reducing to 5.93%
• 5.75% 5 Year Fixed, £899 product fee, 75% LTV, Loans £5k - £2m – reducing to 5.49%

Semi exclusive remortgage products - reduced

• 6.15% 2 Year Fixed, £799 product fee, 85% LTV, Loans £5k - £2m – reducing to 5.83%
• 5.75% 5 Year Fixed, £799 product fee, 75% LTV, Loans £5k - £2m – reducing to 5.39%

superstylin

Good news that the first bank has reacted to the calming market. 

I'll be watching over the next few weeks to see if it's worth ditching the 5.14% 5 yr fix I recently set up with HSBC (existing customer). It's currently on hold until April so I've got time to see how other banks follow. 

Troy_af

I have a reserved 5.4% rate. Looking to complete on a purchase possibly December.

Will be very interesting to see what happens over the next 6 weeks or so. What are people predictions on likely rates in 6 weeks? Under 5%? 

superstylin

@Troy_af

The MSE analysis refers to a potential 0.5% reduction which would take both mine and your rates below 5%. It doesn't sound like much, but that'd save me £32 a month (or rather save me in interest as I would be reducing my mortgage term and keeping the same monthly payment if possible). 

CookieRose

Troy_af said:

I have a reserved 5.4% rate. Looking to complete on a purchase possibly December.

Will be very interesting to see what happens over the next 6 weeks or so. What are people predictions on likely rates in 6 weeks? Under 5%? 

I have 5.39% / 5yr reserved until Feb 2023 for a remortgage.  Will also be watching with interest over the coming months!

kazzyb123

If you have a reserved rate does that mean you have been offered a mortgage at that rate but have 6 months to take up the offer?
I have 9 months left on fixed deal currently 2.16% ERC is 950.
meeting broker tomorrow and don’t know what to do.
if we have to stay with NatWest it’s gone up to 6.04% and seems to be going up every few days!!!
I really don’t know whether to wait or fix it’s a nightmare 

Ksw3

@kingstreet what does semi-exclusive mean in this context?

K_S

Ksw3 said:

@kingstreet what does semi-exclusive mean in this context?

@ksw3 Generally speaking it refers to products that are available only through certain mortgage clubs (an intermediary between the lender and broker/network), certain mortgage networks and/or certain mortgage brokers.

Here's an example of a semi-exclusive product distribution -



In this case Barclays probably doesn't want to risk a flood of applications or unwanted attention due to cutting rates and has limited the release to certain trusted channels to limit volumes.