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Mortgage rates could fall by Christmas, brokers warn

Summarised from 4 outlets · Updated 19 Oct, 15:28 · Archive

Several lenders have cut mortgage rates this week, with experts predicting falls of up to 0.35 percentage points by Christmas.

Several lenders have begun cutting mortgage rates again this week after rates climbed close to, and in some cases reached, 6% earlier in October. According to Moneyfacts, the average five-year fixed mortgage rate hit 6% on October 5, whilst the average two-year fixed rate reached 5.98%.

HSBC has reduced selected fixed mortgage rates by up to 0.14 percentage points, with deals starting at 4.96% for two years and 4.99% for five years. NatWest has also cut selected rates by up to 0.17 percentage points, with five-year deals starting at 4.95%.

Mortgage experts expect rates to edge lower by Christmas as lenders compete for customers and respond to any improvement in wholesale funding costs. Steven Greenall, Mortgage and Protection Advisor at Protect & Lend, said: 'I anticipate rates to be a little lower than now, at around 0.25% to 0.35% lower than where they are currently for two and five-year fixed.'

However, brokers have warned borrowers against waiting for a dramatic drop in rates. They cautioned that any reductions are likely to be gradual rather than sustained. Volatile swap rates, inflation and geopolitical events could quickly reverse recent progress, and some of the latest cuts may simply undo increases introduced earlier in October rather than signal a new downward trend.

Mortgage rates could fall by Christmas, brokers warn
Image: Swindon Advertiser

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In this story: HSBC · NatWest · Moneyfacts · Steven Greenall · Protect & Lend

This summary was written by AI from the headlines and standfirsts above, and states as fact only what at least two outlets report. How we use AI · Report a problem