Mortgage Rate Predictions 2024 and Their Impact on Homeowners

Mortgage Rate Predictions 2024 and Their Impact on Homeowners

Mortgage rates are poised for potential changes in 2024, as experts weigh in on the likelihood of a significant decrease. A recent report from, citing insights from private bank Barenberg, sheds light on the factors influencing these predictions and the potential implications for homeowners. 

The core of the mortgage rate predictions for 2024 revolves around the base rate, a key metric influenced by various economic factors. Many experts anticipate a base rate cut, contingent on the trajectory of UK inflation. The crucial question is whether inflation will continue to decline as expected, with projections indicating that it might not reach the Bank of England’s (BoE) 2% target until 2025.

While inflation is expected to keep falling in 2024, unforeseen accelerations in this decline could prompt the BoE to initiate base rate cuts sooner than anticipated. According to data from Barenberg, inflation has outpaced expectations in the current year, creating a scenario where the BoE might consider reducing the base rate in 2024. The projections suggest a potential decrease to 4% by the end of the year, a significant shift from the current 5.25%.

Recent official figures indicating a contraction in UK gross domestic product in October have prompted money markets to adjust their expectations. Market movements are now factoring in four quarter-point cuts to interest rates, starting from the summer. This anticipation suggests a potential base rate decline to as low as 4.25% by the close of 2024. These developments have direct implications for homeowners, particularly those with variable-rate mortgages, as the base rate directly influences their mortgage rates.

The insights driving these predictions are sourced from private bank Berenberg, providing a credible foundation for understanding the potential shifts in mortgage rates. Berenberg’s analysis, taking into account inflation trends and economic indicators, suggests a plausible scenario where the base rate could decrease by 1% in 2024, offering a ray of optimism for homeowners.

Amidst these projections, homeowners stand to benefit from potentially lower mortgage rates. Variable-rate mortgage holders, in particular, are likely to see favourable adjustments as the base rate undergoes potential cuts. This creates an opportune moment for homeowners to evaluate their mortgage strategies and consider refinancing options that align with the evolving economic landscape.

As we look ahead to 2024, the prospect of mortgage rate adjustments brings both opportunities and considerations for homeowners. The predictions, rooted in data from Barenberg, suggest a potential decrease in the base rate, signalling a positive outlook for those navigating the mortgage market. Stay informed, stay proactive, and consider consulting with financial experts to make the most of these potential changes in the coming year.


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Approved by The Openwork Partnership on 21/12/2023


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