Mortgage rates are falling in the UK as lenders battle for business in 2024

Jan 29, 2024

After a gruelling two years of rising interest rates, the UK mortgage market is now seeing a price war as lenders compete for business. This is good news for borrowers, who are now finally seeing rates fall.

Halifax, one of the country’s biggest mortgage lenders, has cut rates by up to 0.92 percentage points for product transfers and 0.83 on remortgages. Other lenders are expected to follow suit in the coming weeks. Swap rates, which determine the pricing of mortgages, have also fallen, and brokers expect lenders to cut mortgage rates further.

However, rates are still far higher than the equivalent rates that borrowers were being offered two or three years ago.
 

What does this mean for home purchasers in 2024?

If you’re looking to buy a home, now is a good time to get a mortgage. Rates are falling, and there are more deals available than there have been in recent years. If you’re already a homeowner, you may be able to save money by remortgaging to a lower rate.

It’s always a good idea to shop around for the best deal when you’re taking out a mortgage. There are a lot of different lenders out there, and they all offer different rates and terms. That’s where getting advice from a mortgage broker really comes into its own.
 

What does our own expert, Steve Morris, predict?

“Having spoken to a few mortgage lender reps this week, I’ve been left with the impression that January mortgage pricing this year has been much like the current price of Christmas fragrance sets in your local chemists. Artificially cheap and left over from December. The December 2023 to January 2024 swap rate pricing certainly supports this; lenders have been lending out to customers from left over unused funds, which they acquired in December at a cheaper price than lenders could buy, just a month later from the wholesale markets in January. Particularly if we look at 5-year swap rates, they are around 0.5% higher now than in December. The real question is, will lenders continue to battle it out for market share with reduced profit margins? In my mind no, doing so would leave almost no room for any profit if lending continues at today’s rates. Whilst Nationwide have slashed rates only yesterday it is important to remember that, until yesterday, they had priced themselves out of the market and were arranging a very small number of mortgages. So, they probably still have a lot of that cheap ‘Christmas money’ left over to use up. Conversely, lenders who have been overly active in 2024 thus far, like Santander, pricing upwards this week already, supports the idea that January’s bargain bin prices probably are not here to stay. Mortgage borrowers looking to fix, need to act and take the ‘reserve and improve’ strategy, because once they are gone, they’re gone.”

 

Here are a few tips for finding the best mortgage deal in 2024:

The higher your credit score, the better the interest rate you’ll qualify for. But that doesn’t mean you can’t get a good mortgage rate with an imperfect score. We specialise in working with customers who might not have the best credit history.

  • Compare rates from different lenders.
  • Don’t just go with the first lender you talk to.
  • Better still, work directly with a well respected mortgage broker.
  • Consider the fees. Some lenders charge higher fees than others.
  • Read the fine print. Make sure you understand all the terms and conditions of your mortgage before you sign on the dotted line.

Get in contact with us or book an initial consultation to see how we can help you secure a mortgage.

Steven Morris – Advising Director

CeMAP CeRER

 

Steve loves a complex mortgage. Most recently he has used his technical geekery to work his way up through Which? Mortgage Advisers, progressing to Senior Adviser and then Onboarding Manager. There, he was responsible for hiring, training and managing new advisers.

He also ran the monthly new starter inductions and wrote and maintained the telephony advice standards of the company. Outside of work Steve can be found coaching and being run ragged by his local under 10’s rugby team, Bristol Harlequins RFC.

Meet the rest of the Advantage Team

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