Average Rate On New Mortgages Deals Predicted To Rise To 3.3% By End Of 2022


Average Rate On New Mortgages Deals Predicted To Rise To 3.3% By End Of 2022

Capital Economics (An economic research consultancy) has forecast the average rate on new mortgages deals to rise from 1.8% in Q1 2022 to 3.3% by end of 2022, then to peak at 3.6 per cent in 2023 as mortgage lenders rebuild their margins.

Andrew Wishart, senior economist at Capital Economics, said: “Lenders have been slow to pass on rising interest rates so far, so we expect a sharp rise in mortgage rates in the months ahead. For example, some banks are offering 60 per cent loan to value (LTV) mortgages at 2.2%, in line with the two-year interest swap rate. If the bank rate was to rise as currently predicted by financial markets, lenders would make no profit on such loans so it is inevitable that rates will rise further.”

Capital Economics correctly predicted the current house price growth back in September 2021, when it said that house prices would rise by five per cent in 2022. The consensus at the time was 1.6%, but UK house prices have already risen four per cent so far this year.

If you are worried about rising interest rates, its worth noting though that despite the recent Bank of England base rate increases, there are currently still available some very good 5-year fixed rate mortgage deals.

By locking into a fixed rate mortgage deal, your mortgage payments are fixed for the period of time the initial deal runs for during which increases in interest rates will not increase your monthly mortgage payments.

At Broadland Consultants, our expert Mortgage Advisers can review the whole of the mortgage market for you for a Fixed Rate Mortgage Deal hopefully saving you time and money.

If you’re based in Norwich or Norfolk, our Mortgage Brokers offer face to face meetings (video and telephone appointments also available)

You can also live search for a fixed rate mortgage deal on our website here: 


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