News about mortgages

Homes available for sale in the UK have reached their highest level for this time of year since 2014, according to Rightmove, limiting price growth as sellers face elevated mortgage rates. Average asking prices for new listings were broadly flat at £371,015, up 1% month on month but down 0.1% year on year. Northern regions saw the biggest monthly falls, while London rose 2.5% after a 6.0% decline over the summer. The average two-year fixed mortgage rate rose from 5.29% to 5.55%, sales agreed fell 8% and new buyer enquiries fell 9% year on year, and some buyers may be waiting for details of the Your First Home scheme.

Mortgage holders should expect interest rates to stay higher for longer, whether or not the RBA lifts them again. The RBA says intense global competition for capital from AI and data centre companies is pushing up the neutral rate, and assistant governor Christopher Kent said there is reasonable evidence neutral rates are rising in Australia and abroad. The cash rate is now 4.6%, the highest in 15 years, and markets have almost fully priced in another rise by mid-2027, with no expected falls below current levels before mid-2028. Economists Luke Yeaman and Paul Bloxham link high government spending, at 26.9% of GDP in 2025/26 and the highest in 40 years excluding COVID-19, to weaker rate effects, and Bloxham urged further federal spending cuts.

Mortgage holders should expect rates to stay high for longer, whether or not the Reserve Bank of Australia (RBA) lifts them again. The RBA says competition for capital from AI and data centre companies is pushing up its estimate of the neutral rate, which Christopher Kent said appears to be rising in Australia and abroad. At 4.6 per cent, the cash rate is the highest in 15 years, markets have almost fully priced in another rise by mid-2027, and they do not expect rates to fall below current levels before mid-2028. Luke Yeaman of Commonwealth Bank warned that higher government spending would force the RBA to push rates harder, while Paul Bloxham of HSBC urged spending cuts after federal government spending reached 26.9 per cent of GDP in 2025/26. Treasurer Jim Chalmers has flagged further savings measures in the December update, though previously announced savings face resistance in parliament.

Mortgage holders should expect interest rates to stay high for longer, as the RBA warns that AI and data-centre investment is pushing up the neutral rate. Assistant governor Christopher Kent said there is reasonable evidence that neutral rates are rising in Australia and abroad. The cash rate sits at 4.6%, its highest in 15 years, and markets do not expect rates to fall below current levels before mid-2028. Commonwealth Bank economist Luke Yeaman argued that heavy government and AI spending makes rate hikes less effective, while HSBC's Paul Bloxham urged tighter fiscal policy ahead of the December update.

Mortgage holders should expect interest rates to stay high for longer, whether or not the RBA lifts them again. The RBA says intense global competition for capital from AI and data centre firms is pushing up its estimate of the neutral rate, and Assistant Governor Christopher Kent said there is reasonable evidence neutral rates are rising in Australia and abroad. At 4.6%, the cash rate is at its highest in 15 years; markets have scaled back bets on another hike, but a rise by mid-2027 is nearly fully priced in, and no fall below current levels is expected before mid-2028. Heavy government and AI-related spending may be reducing the effectiveness of rates, forcing the RBA to hit households harder, and Luke Yeaman of Commonwealth Bank warned that more government spending would be a serious mistake. HSBC's Paul Bloxham urged further federal spending cuts, as federal spending reached 26.9% of GDP in 2025/26, the highest level in 40 years excluding COVID-19.

NatWest has cut some fixed-rate mortgage deals, including a two-year fix at 5.04% and a five-year fix at 4.98%, while HSBC, which currently offers a 5.01% two-year and 5.03% five-year fix, looks set to start offering sub-5% fixes. NatWest's largest reductions, up to 0.17 percentage points, are on five-year remortgage deals at 85% and 90% LTV, and HSBC has cut across its purchase and remortgage ranges from 60% to 90% LTV. Industry commentators said the cuts reflect lenders competing for business rather than cheaper funding, as five-year swap rates rose from 4.619% to 4.723% over the past month. Other lenders could come under pressure to review their own pricing.

JPMorgan Chase CEO Jamie Dimon warned in a Bloomberg interview that rising borrowing costs could leave many companies unprepared when they refinance or borrow, as higher credit spreads raise their costs. He said tech firms borrowing heavily in 2026 to build AI data center infrastructure are competing with the U.S. Treasury for funds, pushing rates higher. JPMorgan strategists reported that deeply distressed loans rose 62.5%, from $40 billion in 2025 to $65 billion in the third quarter of 2026, the highest since March 2020, though this does not mean all those companies will default. Higher rates also reach households, with 30-year fixed mortgages averaging 7.40% as of October 8, 2026, according to Freddie Mac.

Redfin data show 368 homes returned to the Greater Boston market in September after deals fell through, a 12.4% year-over-year rise, with 11.4% of all deals collapsing, up 2.3 percent from September 2025. Mortgage rates have climbed, with the national 30-year average at 7.4% according to Freddie Mac, straining affordability, though experts say other forces are also at work. Buyers typically pause after rate increases before returning, and rising inventory has put pressure on sellers, with 2,072 listings cutting prices in September, up 26.4%, and 26.3% of listings offering concessions in August. Buyers now have more leverage to negotiate price, credits and inspections, and a Waltham-based Realtor says now is the optimal time to buy.