Have savings and mortgage rates already peaked?

This is Money Podcast

This is Money

Business News, Business, Investing, News

4.1 • 650 Ratings

🗓️ 25 November 2022

⏱️ 48 minutes

🔗️ Recording | iTunes | RSS

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Summary

Savings and mortgage rates rocketed after what must now always be known as the 'ill-fated mini-Budget', but even as the Bank of England continues to raise rates have they already peaked.

The top fixed rate savings deals have edged down from their highest levels - a five-year fix can no longer be had above 5 per cent, for example, while the best two year fix is at 4.75 per cent.

So, if you want to lock into a good savings deal, should you grab one now?

Or did rates simply race ahead of the Bank of England and the next round of base rate rises will bump them up some more?

On this podcast, Georgie Frost, Helen Crane and Simon Lambert look at the potential future of savings rates and why even if they are slightly off their peak, you should still move your money from old accounts.

But if a dip in the top savings rates is bad, the easing of mortgage rates is good news. Average two and five-year fixed rates rocketed all the way to above 6.5 per cent. The best five-year fix is now down to 5.95 per cent.

But this is still way higher than it was, so where will mortgage rates settle and is it worth holding off?

The team discuss that and the implication for both house prices and first-time buyers.

And finally, an energy double header:

On a serious note the energy price cap (which we won't pay due to the energy price guarantee) has jumped again, this time to £4,279 for the average household over a year. If we won't pay that, why does this matter?

And on a lighter note, what happened when Harry Wallop (who refuses to let his family turn the heating on) tried out a bunch of oddball devices designed to warm the person not the room, ranging from an odd foot warmer, to a heated gilet, and a wearable sleeping bag that makes you look a bit like a crazy caterpillar?

Transcript

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0:00.0	Welcome to This Is Money Podcast. I'm Georgie Frost and joining me and editor Simon Lambert today is assistant editor Helen Crane.
0:09.0	And coming up and down, have savings rates peaked? How low will mortgage rates go? The energy price gap is going up. Do we need to worry?
0:17.0	And to keep the heating bills down is wearing a sleeping bag.
0:21.9	The answer. Don't forget.
0:25.7	Step to date with all the latest breaking money news, just go to this ismoney.com.com.
0:28.1	Or download the app.
0:32.3	Market updates and conversations around the financial world don't have to be boring.
0:39.2	The Digest and Invest podcast by E. Toro is a great way to tune into what's happening in a fun and easily digestible format.
0:44.9	Discover the Digest and Invest podcast at E-Toro.com forward slash academy forward slash podcasts.
0:52.0	But first, we've been enjoying reporting on positive news for savers of late, but are the good times over?
0:56.0	Interest rates on the best fixed saving deals have been falling back in recent weeks after reaching highs not seen for more than a decade.
0:59.2	At the start of this month, the best one-year rates were as high as 4.65%.
1:03.5	Now the best deal pays only 4.36%.
1:07.3	It's a similar picture across the board.
1:10.4	So, Simon Lambert, what's been happening?
1:14.7	Well, we saw a scenario where after what is now officially known as the ill-fated mini-budget,
1:23.3	the one that Quasi Quarteng delivered and swiftly led to his departure, Liz Truss's departure,
1:29.8	and the installing of a new Prime Minister, new Chancellor, and round of tax hikes to replace
1:37.3	the tax cuts that we had previously got. In the middle of all of that, interest rate expectations
1:43.1	were rocketed because of the wave of tax cuts we were getting, concerns over various things, guilt yields went up, the thought that the Bank of England was going to have to raise interest rates quicker than we thought and higher than we thought.
1:57.3	Pressure on the markets from the pension fund scenario where there was a vicious circle of selling of guilt and all this kind of stuff.
2:04.6	One of the bits that that fed into in the real world was savings rates suddenly escalated really quite quickly.
	...

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