Fixed Rates Further Reductions – When should you Fix in?
The average 2 year fixed product was around 6% in November whilst a 5 year fixed product was priced only slightly less. This was on the back of steady increase through 2022 until we saw the big spike after the mini budget. Fortunately rates have continued to reduce steadily since, with the lowest 5 year fixed products now not far from 4%. This is great news for the estimated 2 million mortgage holders coming off fixed products in 2023. Even with the Bank of England expecting to increase the base rate by a further 0.5% in February, fixed rates are expected to fall further as lenders have become involved in a mortgage price war.
So, when is the best time to lock in a new rate? We would usually advise clients to start looking at options at least 6 months before their current product ends with a view to applying for a new product, either with the current or with a new lender. However, with rates expected to continue to reduce, it may be worth waiting to see if rates will reduce further before applying for a new product. It is worth bearing in mind if you haven’t completed your new mortgage yet, many lenders will allow you to take advantage of new, lower rates that have become available since an initial application was made.
Here at JF Financial Solutions, we use our experience and knowledge to guide you through the whole process, with the aim of securing the best product for you. So, if your mortgage is due for renewal in the coming months, please contact us and we would be happy to discuss the options available to you.