Do you think lenders will cut mortgage rates further? Have your say
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Mortgage rates have been coming down as interest rates have fallen but lowered expectations of aggressive cuts by the Bank of England (BoE) have created some uncertainty.
Data from the BoE released on Monday showed that the "effective" interest rate — referring to the actual interest paid — on newly drawn mortgages slightly decreased to 4.49% in April.
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However, the rate on the outstanding stock of mortgages increased to 3.86% from 3.84% last month.
Alice Haine, personal finance analyst at online investment platform Bestinvest by Evelyn Partners, said: "While easing mortgage rates may be improving the affordability position for some, many borrowers are still contending with higher repayment costs, particularly anyone emerging from ultra-cheap fixed-rate deals secured when interest rates were at rock bottom.
"This was evident in the rate for the outstanding stock of mortgages, which rose to 3.86% in April from 3.84% the previous month."
Read more: UK house prices rise in May as higher wages, low unemployment boost market
Data from Uswitch last week showed that the average two-year fixed mortgage rate stood at 4.9%, while while five-year fixed deals average 5.24%.
While every major lender is offering a deal under 4%, a recent jump in inflation has cast doubt over the pace of further BoE interest rate cuts and on mortgage rates, as a result.
UK inflation rose by 3.5% in the year to April, which was a sharp rise than expected and up from the 2.6% reading in March.
The BoE lowered its base rate to 4.25% earlier in April, but traders have scaled back their bets of the amount of rate cuts it will announce this year. BoE interest rate decisions influence the rates that lenders apply on the money customers borrow, on products such as mortgages.
Do you think that lenders will lower their mortgage rates? Vote in the poll below.
Yahoo UK's poll of the week lets you vote and indicate your strength of feeling on one of the week's hot topics. After the poll closes, we'll publish and analyse the results each Friday, giving readers the chance to see how polarising a topic has become and if their view chimes with other Yahoo UK readers.
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