A New Source of Economic Anxiety in Britain: Soaring Mortgage Rates

Over the past month, almost all of Ms. Truss’s policies have been reversed. Government bond yields have dropped, and traders have significantly lowered their bets on how high the central bank will have to raise interest rates. Even so, mortgage rates have hardly budged. On Wednesday, the average two-year fixed rate was 6.25 percent, down slightly from a peak of 6.65 percent on Oct. 20, according to Moneyfacts, a financial information service

Ms. Foulger, like millions of others, is hoping these mortgages rates fall further, so that by the time her current arrangement expires in March, she may be able to opt out of her 5.89 percent offer and get something better.

Deciding when to go with a new mortgage offer is the dilemma facing households across the country: Sign now and buy some certainty or wait and hope that rates fall, even if it’s only a little.

“The natural inclination will be to fix, but they’ve got this kind of nagging doubt about whether the rates may just come back down again,” said David Hollingworth of LC Mortgages, a large broker and advisory firm.

Dan Taylor, 39, has been going back and forth over what to do. The two-year fixed rate on the mortgage for the three-bedroom Victorian house that he and his wife own in Exeter, in the southwest of England, expires as the end of February.

When they bought the house in 2008, they paid £900 a month. “Then everything went in our favor,” Mr. Taylor said. Interest rates came down, and the mortgage payments fell to £500, with renewals every two or three years.

Article source: https://www.nytimes.com/2022/11/17/business/uk-mortgage-rates-economy.html