Mortgage rates now stable, but days of 1 and 2% over

But interest rates are now, on average, triple what they had previously been.

Shortly after the then-chancellor, Kwasi Kwarteng, announced £45bn. of tax cuts on 23 September, many Guernsey lenders withdrew or immediately increased their rates, which had been 1% or 2%.

The mortgage rates now on offer are mostly between 5% or 6%.

Oracle Finance director Conor Burke thought that rates were reaching a peak after the stabilisation of the UK political scene over the last few weeks and that there were some indicators that they would level out and even start to drop a little.

The Bank of England is due to announce any change in base rate at noon today and Mr Burke thought it would not be as high as previously feared.

‘I think the expectation is that the base rate rise is going to be less than previously thought, but we won’t be going back to rates of 1 or 2%,’ he said.

‘There was a definite impact on the mortgage market for new properties, and we’ve seen a significant number of people whose rates are coming to an end in the next year or so getting in contact. People whose rates are coming to an end next year should reach out now for advice.’

Cherry Godfrey mortgage and life insurance adviser Emily Knight said that all the lenders were now in line with each other.

‘We are still getting mortgages enquiries, but people are nervous, the cost of living going up is making people plan more carefully,’ she said.

‘A few lenders are set to review their rates in the next few weeks. But whether they are up or down will probably depend on the Bank of England base rate change.’

The one lender which was still offering rates below 5% were Lloyds, but broker Pierre Blampied, managing director of SPF Private Clients, said that the lender had this week increased its fixed rate deals and was now comparable to other lenders.

‘Prior to this Lloyds have benefited from significant re-mortgages due to their market-leading fixed rates,’ he said.

‘The market currently has paused for breath as banks assess affordability and I believe this will impact first-time buyers the greatest.

‘Activity has curtailed for house purchases but re-mortgages have increased significantly as there has been a wide divergence in rates being offered.

‘At present I currently view fixed rates to be too high and that discounted/tracker rates offer better value, albeit care is needed if certainty is required and if rates increase from current levels, so these rates will also increase.’