Mortgage rate concerns skyrocket with more than a 500% increase in online searches

Following the impact on the financial markets of the mini-budget, new research from Better.co.uk reveals the most searched concerns of UK property buyers and homeowners.

It’s unsurprising to see both mortgage rates and interest rates in the top three mortgage concerns in the UK currently. Searches around mortgage rates have increased by 508%, up to 110,000 average monthly searches. Crucially, 60% of all these mortgage rate searches are found to be of negative sentiment.

Online queries around interest rates have also increased by 233% to 90,500 average monthly searches, making them the UK’s third most pressing concern. Close to one in three (31%) of these searches also feature negative sentiment.

The biggest concern overall is house prices, which see an average of 135,000 searches a month.

Better.co.uk expert Sam Amidi, Head of Mortgage Sales, discusses whether Brits should be worried about mortgage rates and states, “mortgage rates are expected to keep increasing in 2023 as the Bank of England attempts to manage inflation by raising the BofE base rate. It’s been speculated that the base rate, currently at 3.5% could rise as high as 4.8% in Q3 of 2023. Mortgage rates may finally begin to decrease again in 2024.

“With mortgage rates on the rise and repayments becoming more costly, buyers should ensure they shop around for the right mortgage deal. Potential buyers should also consider that they put down as big a deposit as possible, as this will increase their access to better mortgage deals with lower interest rates. Those most affected by increasing mortgage rates are:

1. First-time buyers, as the already hefty cost of a property, is compounded with expensive monthly payments and the cost-of-living crisis
2. Those coming to the end of a low fixed term rate; anyone fortunate enough to have locked into a low mortgage rate in the last few years will face the stark difference in interest rates when they go to remortgage.
3. Anyone on standard variable rate mortgages as their mortgage interest rates are subject to change in response to the market and the base rate.
4. Those with lower household incomes will feel the strain when it comes to higher mortgage rates and repayments. This on top of the cost-of-living crisis will put financial pressure on households with lower incomes.

“Rising interest rates will make it more expensive to borrow and difficult to secure an affordable mortgage deal. This may deter many homebuyers from looking to buy in the current market. As mentioned above, it is also expected that house prices will drop, meaning that sellers may not get what they think their home is worth.”