Mortgage rates to stay above 4% this year

Experts do not expect mortgage rates to fall below 4% before the end of this year. Ross Murphy, senior adviser at Capricorn Financial Consultancy, says the outlook for mortgage rates for the coming year is “optimistic", noting that with swap rates falling, the market is “increasingly seeing rates slide into the region of 4%-4.5% as a result”. Iwona Hovenko, a real estate analyst at Bloomberg Intelligence, does not expect mortgage rates to fall below 4% this year but says it is a possibility in 2024, especially in the second half of the year. Chris Sykes, technical director at Private Finance, says the prospect of a deal offering a rate below 4% by the end of this year is “no more than a dream”. However, he says larger lenders might be able to price products as low as 3% - 3.5% by the end of 2024. Moneyfacts data shows that the average two-year deal is currently 6.08%, while a typical five-year deal is 5.68%. 

City AM (27/11/2023)