Since the ill-fated mini-Budget, the markets have thankfully calmed down, with swap rates – used to price fixed-rate mortgages – falling and lenders cutting their pricing accordingly. The below chart shows where swap rates are currently compared with the same time last year, and how they are edging downwards from where they were at the end of December.
Current 17 Jan 2023 19 Dec 2022 18 Jan 2022 4.277% 4.252% 4.321% 0.837% 4.060% 4.055% 4.338% 1.103% 3.834% 3.824% 4.184% 1.180% 3.571% 3.565% 3.913% 1.192% 3.395% 3.394% 3.700% 1.167% 3.288% 3.291% 3.537% 1.151% 3.251% 3.252% 3.449% 1.123% 3.105% 3.095% 3.272% 1.007%
While rock-bottom sub-1 per cent five-year fixed-rate mortgages are a thing of the past, the good news is that fixed rates are also slowly edging downwards, with sub-4 per cent deals possible before long. This is partly due to falling cost of funds, lenders getting service levels under control and the need to compete for business.
Meanwhile, Base Rate looks set to rise again at the Bank of England’s next meeting as inflation, while edging down slightly in December, is still rather higher than the 2 per cent target. Inflation showed a slight dip compared with November, falling from 10.7 to 10.5 per cent. While it is slowly moving in the right direction, it is still close to a 40-year high so the markets expect the Bank to move again next month, raising base rate from its current level of 3.5 per cent.
Some borrowers are opting for variable-rate mortgages with no early repayment charges with a view to moving onto a fixed rate once pricing eases further. Variable-rate deals tend to be priced cheaper than fixes, at least initially, and if interest rates don’t rise as high as predicted, this option may turn out to be a wise move. However, if you need certainty to help with budgeting, a variable rate may not be suitable.
With so much continued uncertainty, it is important to seek advice. AWS Private Finance is a whole-of-market broker who will look for the best mortgage for your circumstances, comparing all the products on the market. Please get in touch for more information.
Hot topic: Private health insurance
It has been widely reported that the NHS is at breaking point with resources increasingly stretched and pandemic backlogs clogging everything up. It means those requiring medical assistance may have to wait months for a doctor’s appointment or referral, with operations routinely postponed.
It is no surprise then that more people are considering private health insurance. Private cover gives access to increased medical resources, as well as reduced hospital waiting times and a wider range of specialist treatments. You may also be able to access specialist treatment that is not available on the NHS because it is too expensive. However, private health insurance (PHI) can be expensive and premiums are rising all the time as the cost of treatment increases and we live longer.
Many employers offer this as a perk to staff, ensuring you and your family are covered should you need to seek medical assistance. But not all employers offer private healthcare schemes, and if your employer doesn’t, or you are self-employed, then you may be interested in taking out an individual policy which covers you and your family.
AWS Private Finance has seen a significant increase in inquiries about private health care. It is important to shop around for cover, which is what we do on your behalf, ensuring we find the right insurance for you and your family’s circumstances, at the right price.
If you are a small business owner, we can also assist you with offering PHI to your employees. This is a great benefit for employees, helping with their general health and mental well being, with some plans offering discounts on gym memberships, as well as fruit and vegetables to encourage healthy eating. At a time when finding good staff can be difficult, this is a useful tool for retaining employees, as well as attracting new ones. Get in touch for more information.