What Do Trump’s Tariffs Mean for Mortgage Rates?

Strap yourselves in, because Donald Trump’s trade wars and tariff tantrums could have a big impact on UK mortgage rates. With the US and China slapping tariffs on each other left, right and centre, it’s creating all sorts of economic uncertainty.

First, the good news

If you’ve seen any news over the last week you will have heard non-stop how the stock markets across the world have been crashing in the wake of Donald Trump imposing huge trade tariffs on almost every nation.

Whilst this is bad news for investors, the flip side is that the reaction of money markets has seen Swap Rates drop significantly. I won’t bore you with the details but Swap Rates are what determine the interest rates bank charge on their mortgages.

A big drop in Swap Rates is expected to see mortgage rates reduce in the coming days (in fact at the time of writing one or two lenders have already announced some imminent reductions)

This goes hand in hand with expectations that the Bank of England will reduce the Base Rate to help ease the situation.

So if you’re coming off a fixed rate any time soon, this is the perfect time to be looking at your options.

Don’t get caught out

As with most things in life, there’s no guarantee that this situation will last for very long, especially giving Trump’s habit of changing his mind as often as he changes his socks!

One of the longer term consequences of the tariffs could be an increase in inflation.

High inflation doesn’t just mean higher prices in the shops. It generally forces the Bank of England to raise interest rates to combat it.

This means your window of opportunity to take advantage of lower rates could be very small.

So what should you do now?

If your mortgage rate is ending within the next 6 months you need to take action straight away. We can lock in a new rate up to 6 months in advance with most lenders meaning you would be protected if rates start to rise again. Your new rate won’t start until your current deal ends so there’s no need to worry about Early Repayment Charges (ERC), it just means your new rate is reserved ahead of time at today’s prices.

And with our Remortgage Promise, if rates improve before your new deal starts, we’ll switch to a better rate at no extra cost.

Remortgage Promise:

• It costs absolutely nothing to speak to an expert adviser and find out your options.
• We’ll secure the best rate available based on your individual circumstances from across the market.
• We deal with the lender and all the paperwork and make the process as stress free as possible.
• Our Mortgage Monitor will track any changes in mortgage rates right up to when your new deal goes live and if a better rate becomes available, we’ll switch you at no additional cost.