UPDATE: |Warning issued to anyone looking for a new mortgage deal after Donald Trump tariffs News

A mortgage expert is advising homeowners to ‘be careful’

Lenders across the UK have began cutting mortgage rates in response to the ongoing situation with US tariffs. Higher trade tariffs were announced by Donald Trump on Wednesday (April 2) affecting imports to the US, forming a major part of his government’s new trade policy.

Trump unveiled a minimum 10 percent tariff affecting the UK, but up to more than 50 percent in other countries. After the markets reopened following the US president’s tariffs, the UK’s FTSE 100 fell by 5 percent, dropping the stock market index to a one-year low as fears worsened over the global impact this could have.

But in what is being seen as a ‘silver lining’ for borrowers amid a period of severe turmoil in the financial markets, homeowners are now starting to see mortgage rates come down this week.

Experts say expectations that interest rates will fall at the next Bank of England meeting have now risen.

Laith Khalaf, head of investment analysis for AJ Bell, said: “Trump’s tariff announcement might have created havoc in the stock market, but there could be a silver lining for UK mortgage borrowers.

“Interest rate expectations are falling as markets price in the potential economic damage from US tariffs, and the likelihood the Bank of England will respond with interest rate cuts.”

He said traders in the financial markets were now “fully pricing in” a cut to UK interest rates when policymakers next meet in May.

Martin Temple, an economist at Leeds Building Society, said underlying interest rates used to price both mortgage and saving products in the UK have already fallen steeply.

For example, the two-year interest rate swap – which is used as a basis to price mortgages – had fallen to 3.66 percent at the beginning of this week, 0.37 percentage points lower than before last Wednesday, according to the building society.

“For mortgage customers, this fall is potentially welcome news, as we would expect these lower swap rates to start to feed through into lower mortgage pricing over the next couple of weeks – especially if these falls are sustained,” Mr Temple said.

However, one financial expert is warning mortgage holders to carefully review the fine print and ensure there are no hidden fees before jumping into a new, reduced rate deal.

Tom Barrett, a debt and benefits expert at caba, has cautioned that it’s crucial to double-check a new mortgage deal to ensure that it’s not ‘too good to be true.’

He recommends looking beyond just the interest rate and offers advice on how to make your mortgage more affordable in the long run.

“Whether your mortgage is coming up for renewal soon or you have already selected a new deal, now is possibly a good time to review and potentially switch to a better rate,” Tom says.

“However, make sure to read the small print and check that a deal isn’t too good to be true. It’s essential to look beyond just the interest rate.

“Fees can add up quickly, so make sure to factor in any arrangement fees, valuation costs, and early repayment charges when comparing deals. A low rate might not always be the cheapest option once fees are included.

“If you’re considering switching lenders, then you should review your contract terms, including early repayment charges and exit fees. You should also check the flexibility of the mortgage, such as the ability to make overpayments or switch deals without hefty penalties.”

Tom says there are also steps you can take to make your mortgage more affordable.

“If you still have some time left on a lower fixed-rate deal, you might be able to pay more now to save later. You can also extend the term of your mortgage,” he says.

“While the typical mortgage term is 25 years, you can switch to 30 or even 40-year terms. You may also be able to consider moving to an interest-only mortgage on a temporary basis. This can keep your monthly payments affordable, although you won’t be paying off the debt accrued when purchasing your house.”

He adds: “f you are struggling to meet your mortgage payments, we would encourage you to speak to your mortgage lender, and to seek free independent debt advice.

“Prior to renewing your mortgage deal or making any changes to your mortgage we would advise reaching out to an independent financial adviser, as they can help you navigate the latest deals and find one that suits your financial situation.”