Fixed mortgage rates could top out at 7.7% in Q2 2023 with the Bank of England Base Rate having hit 3.75% by the end of this year, according to the latest Housing Prospects report from CEBR.
The leading economics consultancy is forecasting a 7.4% rate for 2-year fixes and 7.7% for 5-year fixes.
CEBR is also predicting 0.75% Base Rate rises in November and December of this year.
It then anticipates rates to peak at 5% in the summer of next year – a whopping 4.75% above the Base Rate of 0.25% seen at the start of 2022.
The report from CEBR reads: “Newly fixed 75% LTV mortgage rates at a 2- and 5-year fix are expected to reach respective peaks of 7.4% and 7.7% across Q2 next year, their highest levels in at least 20 years.
“By significantly reducing mortgage affordability and demand among those seeking to borrow or remortgage, this is set to weigh on price growth across the coming two years.”
