Leaves are falling, mortgage rates are dropping – Find the best mortgage deal this autumn.

As the crisp autumn air arrives and the leaves begin to fall, homeowners and homebuyers across the UK are noticing an exciting seasonal change – mortgage rates are dropping. After a period of high interest rates, there’s now a window of opportunity to secure a more favourable mortgage deal. Whether you're looking to buy your first home, move home or refinance your existing mortgage, autumn may be the best time to act.

Why mortgage rates are dropping this autumn

Mortgage rates in the UK are largely influenced by the Bank of England’s base rate, which had risen considerably in recent years to tackle inflation. Whilst inflation remains above the Bank of England’s target of 2%, the worst of the inflationary surge seems to have passed, providing some relief to borrowers.  This shift has led to the beginning of a reduction in mortgage rates.  An important factor in this is “swap rates”.

What are swap rates and how do they affect mortgage rates?

Swap rates are the rates at which banks lend to each other for various periods of time (usually from 2 to 10 years) in the financial markets. These rates are a key indicator for lenders when determining the interest rates they offer to mortgage customers. Swap rates are linked to the cost of borrowing for banks, and since they are largely influenced by inflation expectations and the outlook for interest rates, they play a significant role in shaping fixed mortgage rates.

In recent months, swap rates have been falling, which has directly contributed to the reduction in mortgage rates. As swap rates decrease, lenders can secure cheaper funding and pass those savings onto borrowers in the form of lower fixed-rate mortgages.

Why autumn is the right time for mortgage shopping

Reduced competition equals better deals - The housing market traditionally slows down after the summer months, with fewer people moving or buying homes during autumn and winter. As a result, lenders are often more eager to attract customers by offering better rates and more flexible terms to meet their annual lender targets. This can be particularly advantageous if you’re looking to lock in a competitive rate.

Tips - How to find the best mortgage deals this autumn 

To make sure you’re getting the best deal on your mortgage, it’s important to be strategic in your approach. Here are a few tips for finding the best mortgage deals this autumn:

Shop around and compare rates – It is crucial to compare mortgage deals from multiple lenders. Rates and terms can vary widely between banks, building societies, and other financial institutions.  If you’re unsure about the best mortgage for your situation, consider working with a mortgage adviser. They can help you navigate the market, find the most competitive rates, and provide expert advice on the type of mortgage that suits your financial goals. A mortgage adviser can help you understand complex terms and conditions and help you avoid costly mistakes.

Consider the type of mortgage - The mortgage market offers a variety of options, including fixed-rate, tracker, and discounted variable-rate mortgages. A fixed-rate mortgage offers stability to manage a monthly budget, while a tracker mortgage may be more suitable if rates are expected to stay low or decrease further in the near future.

Factor in the costs beyond the rate - While the interest rate is a crucial element, don't forget to consider the overall cost of the mortgage. Look at the arrangement fees, valuation fees, and any other costs that might affect the total expense of the mortgage over its term. In some cases, a mortgage with a higher rate but lower fees might work out better in the long run.

If you are unsure about the best option for you, a mortgage adviser can help guide you through the process and explain the pros and cons of each type of loan.

The changing of the seasons could bring a change to your financial future, so don’t miss the chance to secure the best mortgage deal this autumn.  This article does not constitute financial advice, so we encourage readers to seek professional financial advice to explore their options to make an informed decision.

Although every effort has been made to ensure that the information provided in this article is accurate and correct, the information provided does not constitute any form of financial advice. We recommend that you take financial advice before making any financial decisions.