Better expat mortgage rates lift property enquiries but poses fixed or variable rate expat mortgage question

Offshoreonline, a leading online mortgage advisor for expatriates, has observed a significant upswing in expat mortgage enquiries, attributing this to the Bank of England’s decision to hold the UK Base Rate steady in November. At the same time, a straw poll of estate agents conducted by the expat online mortgage broker revealed a steep rise in enquiries during the second week of November, indicating a growing interest in the UK expat buy to let market and house buying in general.

The current stability in the UK Base Rate has created a favourable environment for potential buyers of UK buy to let properties in 2024, according to Offshoreonline. With this positive outlook, expat mortgage holders are presented with a critical decision—whether to opt for a fixed or variable rate expat mortgage.

Traditionally, fixed-rate mortgages provide budgeting certainty, while variable rates offer flexibility for early repayments and loan size reduction. However, the current market presents a unique challenge. Normally, the security of a fixed rate comes at a higher cost than a variable rate, but the landscape has shifted, and fixed rates are often more affordable than their variable counterparts.

The question arises: Should expat mortgage holders lock in a fixed rate? Many industry commentators speculate that the UK Base Rate has peaked, anticipating a downward trend in the future. The market consensus is leaning towards potential UK Base Rate cuts towards the end of 2024, albeit by relatively modest amounts. The primary driver to allow this change will be evidence of falling inflation, but with political factors also likely to exert influence, given the impending UK general election.

In historical terms, mortgage lenders typically aim for a margin of approximately 1% to 1.25% over the UK Base Rate. In the current market, where the Base Rate stands at 5.25%, a fixed rate at 5.99% appears attractive. Opting for a fixed rate today not only secures a competitive rate but also provides budgeting certainty for a five-year period. Offshoreonline suggests that variable rates could be unlikely to fall below 5-year fixed rates until at least the end of the following year.

By committing to a fixed rate now, expat mortgage holders stand to benefit from a range of advantages, including a competitive rate, budgeting certainty, and locking in the potential for lower house prices before the market undergoes a shift.

Guy Stephenson of Offshoreonline ends, “As the expat mortgage market continues to evolve, we remain committed to providing expert guidance to expatriates navigating the complexities of the UK property market.”

Offshoreonline is a leading online mortgage advisor specializing in providing mortgage solutions for expatriates. With a focus on delivering tailored advice and competitive rates, Offshoreonline assists expats in achieving their property ownership goals in the UK.