Inflation: The Game-Changer the Mortgage Market Has Been Waiting For?

As we await this week’s inflation data, the mortgage market is holding its breath. The question on everyone’s mind is: could a positive inflation print spark a rate war among lenders, similar to the one we saw at the end of 2023 and early 2024?

Inflation rates have been steadily decreasing, but will this trend continue?

According to brokers, the answer is a resounding yes. One broker stated, “Wednesday’s inflation figures could be the game-changer the UK mortgage market has been waiting for. With the long-awaited 2% inflation target finally within reach, we’re on the brink of a potential base rate cut that could ignite a fierce rate war among mortgage lenders.”

Mortgage rates have been on the rise, but could a base rate cut change the game?

Another broker added, “While inflation reducing on Wednesday will be excellent news for the economy and pile pressure on the Bank of England to make that first base rate reduction in June, mortgage lenders have already priced multiple cuts over the next 12 months into their 2-, 3- and 5-year fixed rates. I would expect some rate reductions should we get the first cut to the base rate in June, as many lenders had been predicting August or September, but we are unlikely to witness a substantial free-fall in mortgage rates that everyone is praying for.”

Interest rates have been on the rise, but could a base rate cut change the trend?

As I reflect on my own experiences as a homeowner, I can’t help but think about the impact of inflation on my mortgage payments. A rate war among lenders would be a welcome relief, but as one broker so aptly put it, “Better times may lie ahead for borrowers, but the golden era of borrowing is long gone.”

Mortgage brokers are eagerly awaiting the inflation figures, but will they spark a rate war?

As we wait with bated breath for the inflation figures, one thing is certain: the mortgage market is on the cusp of a significant shift. Will we see a rate war among lenders, or will the base rate cut be a slow burn? Only time will tell, but one thing is for sure - the game is about to change.

The mortgage market is on the brink of a significant shift - but what does the future hold?