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Will Mortgage Rates Go Down in 2024?

Two house with arrows up and down representing mortgage rates

Mortgage rates are a key consideration for homebuyers and those considering refinancing, with many people wondering whether mortgage rates will go down in 2024. In this article, we’ll explore the factors that might influence mortgage rates for the rest of this year, and as we head into the next 12 months or so.

Current Mortgage Rate Landscape

To understand where mortgage rates might be headed in 2024, it’s helpful to first examine the current landscape. As of October 23, 2023, two-year fixed-rate mortgage rates in the UK are as low as 5.09%. This is quite an improvement to previous months and down from the 6%+ figures that we saw earlier this summer.

Factors Affecting Mortgage Rates

Mortgage rates are not set in isolation; they respond to a complex web of economic and financial factors. The Bank of England (BoE), responsible for overseeing interest rates, plays a pivotal role. Additionally, economic factors such as inflation, economic growth, and employment figures have a considerable influence.

2024 Economic Outlook

The trajectory of mortgage rates in 2024 depends largely on the economic outlook, particularly inflation. Inflation, which is often a key driver of rate decisions, has started to fall and currently stands at 6.7%. This is down from over 11% in October 2022 and just under 7% in August 2023.

Current autumn 2023 projections from the Bank of England show that inflation is expected to fall further to around 5% by the end of 2023. Higher interest rates will also help to bring inflation down further by reducing the amount of overall spending in the economy.

Overall, the BoE say that inflation is expected to continue falling in 2024 and reach the 2% target by the first half of 2025.

Market Sentiment and Uncertainty

Beyond the fundamentals, market sentiment and global uncertainty can exert pressure on mortgage rates. Ongoing global events continue to contribute to a sense of uncertainty in the financial markets, which can sway investor confidence and, in turn, impact interest rates.

Expert Opinions and Predictions

So, will mortgage rates go down in 2024? We asked David Jackson, MD of Prestige Private Finance for his thoughts on the matter. He said: “I expect a gradual softening of the rates in 2024, driven by a curb in inflation, general market competition and an impending general election.

That said, if the last few years has taught us anything, it is to expect the unexpected. Continued global events make it difficult to say with complete certainty how next year will unfold.”

The Final Word

The path of mortgage rates in 2024 is somewhat uncertain, influenced by a combination of economic factors, central bank policies, and global events. Whether you plan to buy a home or remortgage, staying informed and monitoring rate trends is essential in making the right financial decisions.

Mortgage Rates 2024: Key Tips for Your Financial Wellbeing

  • Plan Your Spending: Create a clear budget to track your money coming in and going out. This helps you manage your expenses effectively and ensures you're prepared for mortgage payments.

  • Bigger Down Payments: Whenever possible, consider putting down a larger initial payment when buying a home. A substantial down payment can lower your loan amount and potentially lead to more favourable mortgage terms.

  • Ask Experts for Help: Seek guidance from an independent mortgage advisor who specialises in understanding the mortgage market. Their insights can help you make informed decisions tailored to your individual circumstances.

Ready to explore your mortgage options or have specific questions about rates in 2024?

Contact Prestige Private Finance today for personalised advice. Our experts are here to guide you through the dynamic mortgage market.

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