Mortgage Rates Expected to Rise Amid Inflation

Mortgage rates in the UK are expected to rise further following an unexpected increase in inflation, which reached 2.3% in October, prompting lenders to cease offering fixed deals below 4%. This trend is reflected in the swap rates, which indicate that the Bank of England may hold off on further interest rate cuts until the new year despite recent reductions. In the US, the average interest rate for a 30-year fixed mortgage is currently 6.812%, slightly down from the previous day, with jumbo loans averaging 7.053% and FHA loans at 6.393%. The Bank of England has already lowered rates from a peak of 5.25% to 4.75% and is expected to implement further cuts next year, although the extent remains debated among economists. Overall, the current economic climate suggests that many borrowers may face continued high mortgage costs in 2025. The market dynamics are influenced by both local and international economic factors, including inflationary pressures and monetary policy changes.