It has been a challenging time for borrowers wondering when interest rates will start to come down and in the meanwhile dealing with higher mortgage rates, making it tricky to plan ahead. This is because Swap rates, which underpin the pricing of fixed-rate mortgages, have been remarkably volatile this year. However, in recent weeks they have settled a little, while news that inflation had finally hit the Bank of England’s 2 per cent target sent them lower still, with five-year Swaps dipping below 4 per cent.

While it is good news that inflation is increasingly under control, the Bank still voted by a majority of seven to two to maintain base rate at 5.25 per cent at the June meeting. In its minutes, the Monetary Policy Committee (MPC) stated that there were still concerning inflationary pressures with consumer prices inflation expected to rise slightly in the second half of the year. The MPC continues to keep an eye on UK GDP, which has grown more strongly than expected in the first half of the year, as well as the labour market. Services price inflation remains higher than projected, and until the MPC is convinced that all of these inflationary pressures are fully under control, it will not cut rates.

With two members of the Committee voting for a quarter-point reduction in rates to 5 per cent, the same as at the previous meeting in April, there has not been a noticeable shift in sentiment towards a cut. Speculation continues as to whether the first rate cut will come in August after a new government is installed.

SONIA swaps
19 Jun 2024 20 May 2024 20 Jun 2023
1 Year 4.867% 4.825% 5.505%
2 Year 4.451% 4.486% 5.476%
3 Year 4.168% 4.246% 5.245%
5 Year 3.859% 3.968% 4.792%
7 Year 3.738% 3.853% 4.472%
10 Year 3.718% 3.834% 4.214%
15 Year 3.781% 3.890% 4.053%
30 Year 3.758% 3.861% 3.803%
As of 20 June Source: Chatham Financial

With a Labour victory looking increasingly likely, the housing market does not seem overly concerned. The Office for National Statistics reports that house prices continue to edge upwards, with the average UK price rising by 1.1 per cent in the year to April. Some estate agents report that some buyers and sellers are waiting to see what a new government brings while others are ploughing on regardless.

Best buy home mover rates (60% loan-to-value)
Rate                Type

4.33%              two-year fix

4.57%              three-year fix

4.28%              five-year fix

Source: Money facts
If you are planning on buying or remortgaging this year, AWS Private Finance can help. We are a whole-of-market broker who will look for the best mortgage for your circumstances, comparing all the products on the market. Products can usually be reserved up to six months before you need them, giving you peace of mind in case rates edge up further. Please get in touch for more information.