Mortgage rates to stay high for years

According to the Office for Budget Responsibility (OBR), mortgage rates are not expected to decline for at least five years, peaking at 4.7% in 2028. This forecast indicates that many homeowners on fixed-rate deals may face higher costs when remortgaging. Hargreaves Lansdown's Sarah Coles observed: "Clearly, millions of borrowers are facing a significant shock." The OBR's predictions reflect concerns over inflation and economic pressures, with the Bank rate expected to drop to 3.8% by 2030. Homeowners currently on low fixed rates may see their payments increase significantly, with those remortgaging facing an average rise of £146 per month. Aaron Strutt from Trinity Financial stated that the only way rates might decrease sooner is if the economy enters a recession.

The Sunday Times (30/03/2025)