Mortgage rate recheck

Prettydudu

I am in the process of buying my first home, which has had a bit of bumps on the road. Currently about to exchange contract My question is with the reduction in the BoE base rate is it advisable I recheck to see if I can get a lower mortgage rate which was 4.8% for 5yrs fix with nationwide or stick with what I currently have. Any pros or cons for recheck for a better rate?

la531983

These things will likely have been priced in months ahead of time, lenders wont necessarily increase or decease rates based on a BoE decision.

our_des

Check with your solicitor if its okay to arrange a new rate given you're close to exchange. We got a lower rate (and reduced the term by keeping a similar monthly repayment) secured with Nationwide the week before exchange/completion in January this year but I'd checked it wouldn't cause any delays with my solicitor 1st and gave her the new info straight away. 

annetheman

As mentioned, fixed rates in the run up to base rate change factored in a cut. Latest is that rates are now increasing with a big lenders due to recent events; if you have the time to do it pre-exchange (absolutely do not do it between exchange and completion, obviously), and are okay with the small but very real risk of an offer withdrawal if e.g. you no longer fit lender criteria in some way, it could be worth checking if you're eligible for any lower rates. 

ReadySteadyPop

la531983 said:

These things will likely have been priced in months ahead of time, lenders wont necessarily increase or decease rates based on a BoE decision.

 Best to look at the "10 Year Yield", not base rate.

https://www.msn.com/en-gb/money/other/major-lenders-hike-some-mortgage-rates-despite-fall-in-base-rate/ar-AA1tXavp

kingstreet

Nationwide issued a new product guide yesterday;-

https://www.nationwide-intermediary.co.uk/-/media/nfi/documents/f6-product-guide.pdf?rev=e7b787eee71c4a848011b85c4903a080&hash=C4112769D02FA13B9D78A3D8E7823824

and the rates were up on previous. As has been mentioned, swap rates are up and only those with a base rate tracker or on SVR are likely to see a reduction.

Albermarle

Prettydudu said:

I am in the process of buying my first home, which has had a bit of bumps on the road. Currently about to exchange contract My question is with the reduction in the BoE base rate is it advisable I recheck to see if I can get a lower mortgage rate which was 4.8% for 5yrs fix with nationwide or stick with what I currently have. Any pros or cons for recheck for a better rate?

Although the current base rate went down, the thinking is now that rates will not go down as much, or as quickly in the next 12 months or longer, as was thought a coupe of months ago. 
So I would think if you ask for a new rate, it could just as well be up than down. Probably best just to press on with the purchase at the agreed rate.

Albermarle

Mortgage rates below 4% disappear: Why are they going up as interest rates fall?

ReadySteadyPop

https://www.theguardian.com/money/2024/nov/18/uk-mortgage-rates-creep-up-as-brokers-warn-of-possible-further-pain-interest-rates-inflation-figures

ReadySteadyPop

Albermarle said:

Mortgage rates below 4% disappear: Why are they going up as interest rates fall?

Interesting article, doesn`t really go very deep on why debt costs are run by the bond markets though, the bond markets run the BOE not the other way round, Trump is most definitely going to cause inflation and volatility in my opinion, can`t see anything but higher rates from here, the Russia situation is also getting more dangerous and more unpredictable.

ReadySteadyPop

https://www.express.co.uk/finance/personalfinance/1978054/rachel-reeves-tax-raid-budget-higher-mortgage-rates