Mortgage rates are forecasted to fall as lenders take advantage of cheaper funding, Octane Capital reveals, after figures show that average swap rates have started to fall.
Octane Capital, who analysed average swap rates over 30 and 60-day periods, found that swap rates have declined at an average daily rate of -0.22% over the last 30 days.
This compares to the 30 days prior saw swap rates increase at an average daily rate of 0.06%.
Over the last 60 days, swap rates have fallen by an average of -0.08% daily, compared to an average daily increase of 0.13% over the previous 60 days.
With inflation in the UK falling to the target rate of 2%, those in the mortgage industry are expecting that a cut to interest rates could be on the cards at the next Bank of England Monetary Policy Committee (MPC) meeting on 1 August.
Octane Capital chief executive Jonathan Samuels comments: “With inflation finally falling to within the BoE’s target rate of 2%, there’s a high chance that we could see a cut to interest rates come August, a year on from them hitting their recent peak of 5.25%.”
“We’re already seeing swap rates start to reduce in anticipation of a potential base rate cut and we expect this trend to continue as the next BoE decision approaches.”
“This will be welcome news for mortgage holders who have seen the cost of their repayments climb considerably in recent times, and so too for prospective buyers who have had to reevaluate their position in the market due to increased borrowing costs.”
