Will mortgage rates go up or down?

Will mortgage rates go down in 2021? We’ve been hearing a lot about mortgage rates trends in light of the Brexit trade deal and coronavirus, so we thought we’d unpack this a bit for all you first time buyers who may be thinking about buying your first home in the coming months.

In this guide, we’ll start by discussing the base rate – what it is and how it affects mortgage rates going up or down. Then, we’ll talk about the mortgage rates trend projected this year in light of the Brexit trade deal and coronavirus. Finally, we’ll weigh in on what first time buyers who are on the fence should consider when deciding when to buy their first home.

We want you to have all the relevant information to make an informed decision about getting your foot onto that first rung of the property ladder. Read on to learn more about this year’s projected mortgage rates and what this means for you as a first time buyer.

Will mortgage rates go down?


Let’s start with an understanding of the base rate. In simple terms, the base rate acts as a guideline for banks and lenders to set their interest rates. This matters to first time buyers because the base rate influences how much customers are charged to borrow money from banks and lenders.

Here’s what you need to know – a lower base rate generally means that mortgage rates will go down. It will be cheaper to borrow and therefore a good time to get onto the property ladder.

What have we seen in recent times? We’ve seen the base rate go down to an all-time low, prompting many first time buyers to take advantage of this cheaper opportunity to borrow. This doesn’t mean you should rush to make a decision, but you should be aware that this could be a great time to buy if you are ready.

Mortgage rates trend

So, what are the projected mortgage rates this year? Many people now expect that the base rate may remain at its current record low for a while, which would be good news for those looking to buy. This mortgage rates trend could be a fantastic opportunity for buyers to lock in some of the lowest rates in history before rates go up again.

But rates won’t stay low forever. With the rollout of the vaccine and life returning to normal, new confidence will hit the markets, meaning there will be an increased demand on services again. In time, we are likely to see an increase in inflation and therefore mortgage rates, so first time buyers may want to act now to take advantage of the current mortgage interest rates trend we’re seeing.



In summary, we have seen the base rate drop drastically in recent times, and if it continues to stay at this historic low, we expect to continue to see great mortgage interest rates for first time buyers. If you are able to buy not, it may be a good decision to do so before rates go up again.

The main lesson to take from this is that you should keep an eye on inflation, which is a major factor when it comes to the affordability of buying a home. Inflation can affect earnings, budgets and, of course, mortgage rates, so keep an eye on it as you continue on your journey to buying your first home.

For more help getting onto the property ladder, check out our First Time Buyer Guide, which breaks down the process of buying your first home step by step. You might also like to read about moving home during lockdown and how to save money in 2021.

If you’re interested in a Pocket property, see our upcoming developments here and learn about buying a Pocket home here. If you’re looking for financial advice specific to your individual circumstances, we’d recommend getting in touch with an Independent Mortgage Advisor (IMA), such as Censeo.

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