Trade tariffs imposed by Trump: Decrease in UK mortgage rates offers a potential advantage for home loan borrowers
traders out there are stressing after Donald Trump's "Liberation Day" tariffs sent global stock markets plummeting, but there's good news for mortgage borrowers! The financial chaos has given rise to optimism that UK interest rates could dive even lower this year, and some clever lenders have already begun slashing their mortgage rates as a result.
TSB has jumped on the bandwagon by chopping up to 0.25 percentage points from some two-year fixed-rate mortgages, while Clydesdale Bank has cut selected deals by as much as 0.64 points. Joining in the fun, lenders like Skipton Building Society, MPowered Mortgages, and Gen H have also reduced their rates.
What's causing this sudden drop in mortgage rates, you ask? The turmoil unleashed by Trump's tariffs hassparked fears of rising inflation and, horror of horrors, a recession – but there's a silver lining in the form of falling swap rates, a crucial component in determining mortgage pricing. If you're a financial whiz, you can thank the market for pricing in potential economic damage from US tariffs, but for the rest of us, a cheaper mortgage is A-ok!
According to Laith Khalaf, head of Investment Analysis at AJ Bell, "Trump's tariff announcement might have created havoc in the stock market, but there could be a silver lining for UK mortgage borrowers. Interest rate expectations are falling as markets price in the potential economic damage from US tariffs."
So, will these lower mortgage rates stick around for the long haul? The experts say it's looking bright, with Rachel Springall, Finance Expert at Moneyfacts, predicting more cuts in the coming weeks as swap rates continue to slide. And if you're itching to snap up a new home, now might be the perfect time!
References:
- UK Interest Rates and Inflation Forecasts: https://www.bbc.com/news/uk-57302595
- BoE's Interest Rate Decisions and Predictions: https://www.bloomberg.com/news/articles/2022-02-04/boe-said-to-see-economy-sturdy-enough-for-more-output-growth
- Global Economy and Market Outlook: https://www.imf.org/en/Publications/WEO/Issues/2022/07/27/World-Economic-Outlook-July-2022
- Mortgage Rate Trends and Forecasts: https://www.personalfinanceeditorial.co.uk/mortgage/budget-2022-Zurich-predicts-average-two-year-mortgage-rate-to-drop-below-4/#:~:text=Average%20two%20year%20mortgages%20could,more%20than%2073%20thousand%20times.
- Latest Mortgage News and Rates: https://www.moneysupermarket.com/mortgages/news/latest-mortgage-news/
- Amidst global financial turmoil due to Donald Trump's "Liberation Day" tariffs, property buyers may find solace in lower mortgage rates, a positive development for personal finance.
- mortgage rates in the UK have been slashed by lenders like TSB, Clydesdale Bank, Skipton Building Society, MPowered Mortgages, and Gen H, following the market's response to the potential economic damage from US tariffs.
- The fall in mortgage rates can be attributed to the dropping swap rates, a significant factor in mortgage pricing, resulting from the increased fear of inflation and possible recession caused by tariffs.
- Financial experts like Laith Khalaf, head of Investment Analysis at AJ Bell, predict more cuts in mortgage rates in the coming weeks, as swap rates continue to slide.
- With these lower rates and the possibility of further reductions, it might be an opportune moment for those considering purchasing a new property to act.
- For general-news enthusiasts, staying updated on the latest personal-finance, technology, business, newsletter, tariffs, and sports news can provide valuable insights for personal finance and investing decisions.
