There are of course many predictions which are consistently made about the interest rates: whether they will go down, when they will go down, and whether they will look better in any particular year. On the whole, these questions are all leading up to the bigger question of whether people should wait to buy their dream house. At Eminence Mortgages, we are here to help you understand how home loan rates work, give some indication as to whether rates will go down, and advise you on what to do in face of all this information.
So, first things first, how do home loan interest rates work? Essentially, these rates reflect the base and national interest rate in the UK. These are established primarily by the Bank of England, but also other financial institutions across the UK. To maintain the inflation rate of around 2%, the base interest rate is changed on a regular basis. Thus, lenders of home loans will also change their rates in order to reflect that rate.
Now, the big question: will home loan interest rates go down in 2024? Experts have in fact predicted that home loan interest rates will fall in both 2023 and 2024. Interest rates will most likely be kept as low as possible so that more people can enter the housing market.
What does that mean for you? We would say that you really should not wait to buy a home based on these predictions. You should be thinking about other, more important factors to make this decision. For instance, the cost of the deposit, closing costs on the loan, and even the actual cost of moving. Buying a home is a huge investment, and you need to look at your overall finances, not just the overall interest rate.
