As we enter 2025, the UK housing market faces significant challenges driven by economic changes and uncertainty. One key development is the recent sell-off in UK government bonds, a reaction to concerns over inflation and public borrowing. This directly impacts homeowners: mortgage rates are climbing, and those on tracker or soon-to-expire fixed-rate deals face potential financial strain.
If you’re a homeowner on a tracker mortgage or with a mortgage deal that expires this year, now is the time to review your situation and act quickly to secure the best possible deal. Here’s what you need to know and how Skyline Mortgage Consultants can help you navigate this critical moment.
The Link Between Government Bonds and Mortgage Rates
UK government bonds, also known as gilts, are vital to the economy. When investors sell these bonds, their yields (returns) rise, which in turn influences interest rates, including mortgage rates.
Recent sell-offs have pushed gilt yields higher, fueled by concerns over rising inflation and the government’s increased borrowing to fund public spending. This spike in yields has forced lenders to reassess and raise their mortgage rates, making borrowing more expensive for homeowners and buyers.
Why This Matters for Homeowners
Rising Mortgage Rates
As gilt yields increase, mortgage rates are climbing. Some lenders have already begun withdrawing some of their most competitive deals, replacing them with higher-rate options. If you’re currently on a tracker mortgage, your monthly repayments are directly tied to the base rate and could rise further in the coming months.Expiring Fixed-Rate Deals
For homeowners with fixed-rate mortgages that expire this year, the window to secure a new deal at a reasonable rate is closing. Waiting too long could result in higher interest rates and significantly increased monthly payments.Increased Costs for First-Time Buyers
Higher mortgage rates mean reduced affordability for those looking to enter the housing market. It’s more important than ever to explore all available options to find the best deal.
What Can Homeowners Do?
The uncertainty surrounding inflation and public borrowing creates a limited timeframe for homeowners to act. Here’s how you can protect yourself and ensure financial stability:
1. Review Your Current Mortgage Deal
Start by understanding the details of your current mortgage. When does your deal expire? Are there any early repayment charges? Knowing this information will help you decide your next steps.
2. Lock in a New Deal Now
If you’re on a tracker or your fixed-rate deal is set to expire in 2025, locking in a new deal sooner rather than later could save you thousands over the lifetime of your mortgage. Lenders typically allow you to secure a new rate up to six months before your current deal ends, so it’s worth exploring your options now.
3. Consider Fixed-Rate Options
While fixed rates are higher than they were a year ago, they offer the security of predictable monthly payments. In today’s volatile market, this stability can provide much-needed peace of mind.
4. Work with a Mortgage Advisor
Navigating the mortgage market during uncertain times can be overwhelming. An independent mortgage adviser, like Skyline Mortgage Consultants, can help you compare deals across the whole market, ensuring you secure the best option for your circumstances.
How Skyline Mortgage Consultants Can Help
At Skyline, we understand that rising mortgage rates and market uncertainty can feel daunting. That’s why we’re committed to helping homeowners and buyers make informed decisions. Here’s how we can assist you:
Whole-of-Market Access: We search the entire mortgage market to find the most competitive deals tailored to your needs.
Expert Guidance: Whether you’re remortgaging, moving home, or buying your first property, we’ll guide you through the process step-by-step.
Online Tools: Use our mortgage sourcing tool to compare rates and calculate your potential savings.
Flexible Online Appointments: Book an online mortgage appointment with our award-winning broker, Tony, to discuss your options in detail.
Time is of the Essence
If your fixed-rate mortgage is due to expire this year or you’re on a tracker deal, don’t wait for rates to climb further. Securing a new deal could save money and protect you from future rate increases.
You can book an online mortgage appointment with Tony easily by selecting a convenient time from our booking calendar.
Your home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it. A fee may be charged for mortgage advice. The amount will depend on your circumstances.
Skyline Mortgage Consultants Limited is an Appointed Representative of The Right Mortgage Ltd, which is authorised and regulated by the Financial Conduct Authority. Skyline Mortgage Consultants LTD is registered in England and Wales Number 8157062. Company Registered Office: Heathmans House, 19 Heathmans Road, London SW6 4TJ.