Mortgage rates after Brexit: What builders need to know?
Hardly anyone had expected the Brexit, a withdrawal from Britain from the European Union. The reactions to the stock market were all the greater, and stocks around the world started to tumble.
At the same time, interest rates markets have come into focus again, which is why many aspiring builders and homebuyers are studying the question of how mortgage rates will develop over the coming months.
Brexit: Nothing is certain
First of all, it is important to realize that Brexit has led to a situation that has not yet existed. It is all the more difficult to take a look into the future. However, the voices of those who do not see too great risks for Europe and Germany are increasing – that is, the economy is unlikely to change much because of changes within the EU.
However, the ambiguity will persist for quite some time. The problem is that the British themselves are not sure how to proceed. First of all, they have to rearrange their political situation, which may take several months.
Impact on the interest rate markets
Although experts sometimes rate the consequences of Brexit very differently, they appear to be relatively unanimous in the interest rate markets. Several financial experts see an opportunity for the central banks to keep their cash locks open or to open them even further in the upcoming EU exit of Great Britain.
One of the reasons for this is the banking environment. The yes to Brexit has severely depressed equity prices of quite a few financial stocks and at the same time, it could be that the financial institutions will continue to struggle in the coming years.
Add to that the difficult situation in Italy. Several large banks are in considerable difficulties, which is why speculation about aid from the state.
As a result of this development, bond yields have noticeably fallen in recent weeks. In other words, prices have tightened, which can be understood as large and experienced investors continue to expect low or even lower market rates. Accordingly, an increase in the European interest rate has moved into the distance or is considered relatively unlikely.
Consequences for builders and buyers
The question of how the interest rates for real estate loans in the coming weeks and months develop, can not be answered for sure. However, it is likely that interest rates will remain at or below the currently very low level. However, it should also be borne in mind that mortgage rates are not linked to the base rate and therefore a deviant development is possible.
In view of the current situation, we expect interest rate fluctuations between the financing offers of individual banks to intensify in the coming weeks. Consequently, it is even more important to take the time to compare interest rates. Only those who collect and evaluate as many financing offers will end up with certainty at low-interest finance.
Fortunately, such a comparison is quick and cheap. After all, there is our independent financing advice. Our consultants will also help you to optimize mortgage lending while looking at the market for the most attractive interest rates.
Comparison is also recommended for other financing
For the sake of completeness, we would like to note that larger interest rate fluctuations are not only conceivable for mortgage loans. Similarly, we believe that installment loan providers are likely to adjust their terms in the near future, resulting in shifts in the top lenders.
Incidentally, we also offer an interest rate comparison for installment loans. We help you find low-lending financing. Of course, this service is free of charge and completely non-binding.