President Trump's Tariffs Indirectly Reduce Mortgage Rates

Although President Trumps global tariffs are continuing to cause turmoil, and will certainly have a huge detrimental effect on the UK economy, with increased prices across imported products affecting families throughout the UK, there might be a silver lining with lenders cutting mortgage rates by up to 0.25%. Economists predict that the BOE (Bank of England) will slash interest rates in an effort to curb an economic downturn. Sarah Coles, head of personal finance at Hargreaves Lansdown, said the Bank of England, "will be really looking to cut interest rates as much as possible in order to support growth". They are predicted to end the year at 3.75 per cent, down from 4.5 per cent now. The predicted cuts could stimulate the economy, encouraging borrowing and spending, but their response will depend on various factors, such as how the tariffs affect inflation, economic growth, and the value of the pound.

MPowered Mortgages was the first lender to cut its full range of fixed mortgage rates. Stuart Cheetham, CEO of MPowered Mortgages, said: “Since Trump announced the “Liberation Day” tariffs we have seen a sharp fall in the swap rates which has enabled us to reduce our fixed rate mortgage rates. Whilst these tariffs could have a detrimental impact on the UK economy with increased prices putting extra strain on UK households, there is a silver lining for mortgage borrowers who will see rates come down over the coming week.", a two-year fix at 60% loan-to-value now starts at 4.05% with a £999 fee, or 4.29% with no fee.

Pete Mugleston, managing director at Online Mortgage Advisor said "With sonia swaps continuing to slide, we’re getting closer to seeing two and three-year fixed rates starting below 4 per cent. If the current trends hold, it wouldn’t be surprising to see lenders break that barrier in the coming weeks. However, many are holding back, likely waiting for sustained swap rate stability before repricing aggressively."

There are certain ways to land the best mortgage deal such as the larger the deposit you have the lower the rate you can get. Remortgaging, if your loan-to-value ratio (LTV) changes, you will get access to better rates than previously. If you can increase your credit score it could help you access better rates. You can lock in current deals sometimes up to six months before your current deal ends.