The head of the biggest mortgage lender in the UK has stated that it is "unlikely" that the cost of borrowing money to purchase a property would go back to the low levels observed during the previous ten years.

The CEO of Lloyds firm, Charlie Nunn, stated that although the firm expects mortgage rates to decline, they won't go back to the almost nonexistent levels of the 2010s.

In an effort to curb skyrocketing price increases brought on by the Covid pandemic and Russia's invasion of Ukraine, interest rates have increased in recent years, which has resulted in an increase in the rate paid on new fixed mortgage terms.

According to financial data provider Moneyfacts, the average two-year fixed mortgage rate was 5.36% on Friday. Dealing for five years was 5.05%.

While pointing out that just roughly 40% of UK residences had a mortgage, Mr. Nunn acknowledged that the rise in borrowing prices has been "really challenging" for homeowners.

The typical household earning a mortgage, he continued, was £75,000, so "many of those families have been able to absorb" larger repayment amounts.

Different persons may be impacted by high interest rates. Monthly payments for mortgage holders with variable or tracker mortgages have increased, as have payments for those trying to get new fixed-rate agreements.

However, since it has grown increasingly difficult to find an affordable offer, first-time home purchasers have found it more difficult to climb the property ladder.

This year, 1.6 million current borrowers' very inexpensive fixed-rate agreements come to an end.

The base interest rate in the UK is now 5%, and it determines the borrowing rates that banks and building societies charge on loans.

Decision-makers maintained that they wanted to ensure inflation, which gauges how quickly consumer prices are growing over time, was staying at reasonable levels, which is why the rate was kept at its present level last month.

According to Charlie Nunn, 2024 had signalled "the turn that we have seen in terms of most people in the country feeling more financially secure," even though certain regions of the UK were "continuing to struggle" owing to the high cost of living.

(Sources: bbc.co.uk)