15/04/2026
Would you rather High Mortgage Rates or High house prices?
There has been a lot of chat about the fact that mortgage rates have jumped up by around 1% in the last month and most rates that I’ve securing for clients are between 4.7% to 5.2%.
This has everyone panicking, which I get to a degree, but is it really that bad?
Well let’s look at potential silver linings;
1) rates aren’t as high as after the liz truss mini budget
2) higher rates could mean that buyers can negotiate lower purchase prices.
Let’s look at that.
Say you can buy a property at £300,000 and get a 3.8% rate, that was a hot rate around a month ago.
10% deposit would be £30,000 and the mortgage would be £270,000.
Over a 25 year term the monthly payments would be £1395.
Now lets say the rate is 4.8% but you are able to buy that same property for £275,000.
10% deposit is £27,500 and the mortgage would be £242,500.
The monthly payments over 25 years here would be £1389
Pretty much breaking even.
Now I can already see the comments around how house prices haven’t come down, but they have, around 15% in real terms.
You also have new build developers throwing in every incentive they can think of to shift empty homes.
Now it’s all area dependent and I must stress that the above rates are figures pulled entirely from thin air for the purpose of this example and as always, what is available to you will depend on your own circumstances and rates at that time and it is important that you seek appropriate mortgage advice.
But I think we need a little bit of calm.
Also, some lenders are actually reducing rates now so this post will be out of date by the time it’s posted!
Anyway, what would you pick?
