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Donald Trump’s ‘tariff war’ is causing global economic turmoil but the silver lining in the UK is that this has led to lower mortgage rates. This is a knock on effect of the expectation of what’s going to happen to interest rates in the UK this year changing dramatically: ‘Donald Trump’s tariffs have caused a massive reappraisal of the future path of UK interest rates,’ says Laith Khalaf, head of investment analysis at AJ Bell.
Markets are currently pricing in 4 interest rate cuts this year, potentially taking the base rate from 4.5% to 3.5%. This is compared to the three cuts that were priced in before Trump’s announcement.
‘Donald Trump may not have intended to liberate UK mortgage holders from high rates, but his tariff announcements have done just that,’ adds Khalaf. ‘Since Liberation Day [on 2 April], the swap rates which stand behind mortgage pricing have fallen decidedly below 4%, and we have seen a wave of lenders offering more competitive mortgages.’
To illustrate what this means for the best mortgage rates on the market:
Best mortgage rates before Trump’s ‘liberation day’
Best mortgage rates after Trump’s ‘liberation day’
Stay up to date on the latest rates with our Best mortgage rates guide.
However, no one knows what will happen next with mortgage rates or how long these rates will be available for. So act quickly. You can start the remortgage process up to 6 months before your current deal ends. You can apply for a mortgage and lock a rate then keep it under review with L&C’s Rate Check service to make sure you don’t miss out on a better mortgage rate before you need to switch. Get in touch online or on the phone today to kick things off.
Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.
However, despite an improving mortgage rates picture, our recent poll of 2,000 UK adults found there’s a degree of uncertainty about mortgage rate expectations this year: 37% think mortgage rates will rise, 25% think they will stay the same, 16% think they will fall and 22% just don’t know.
Paula Higgins, CEO of HomeOwners Alliance, said:
‘That more than a third of the public are bracing for further mortgage rate rises shows how fragile confidence remains. Uncertainty over the economic climate and what’s coming next does nothing for consumer confidence.’ says Paula Higgins.
‘The concern around mortgage rates is understandable. Many mortgage-holders faced hugely increased mortgage costs after taking out mortgage deals in the aftermath of former Prime Minister Liz Truss’s disastrous mini-budget in 2022 which sent markets reeling and mortgage rates rocketing overnight.
‘But the good news is that unlike what happened in the Truss era, mortgage rates are now going down and are expected to continue to do so. But nothing is guaranteed, so if your current mortgage deal expires in the next 6 months and certainly if it expires in the next 4 months, start shopping around for a new mortgage deal asap. You can then lock in the best mortgage deal and keep it under review.
Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.
It’s a similar picture for Buy to Let mortgages, with rates improving but remaining uncertainty of what may happen next. Stay up to date with our Best Buy to Let mortgage rates guide.
It’s also important for landlords to stay up to date with wider issues that have an impact on Buy to Let, from government policy to tax. ‘With all these external and internal factors at play when it comes to the UK property market, staying informed and networked is key to success for property investors,’ says Kate Faulkner, UK Property Analyst at Property Checklists. T
he property expert advises: ‘Attending events like the National Landlord Investment Show offers investors and property professionals a platform to connect, network and stay informed on critical topics affecting the Buy to Let and private rented sector.’
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