Global politics might seem a world away from your mortgage, but recent tariff announcements by Donald Trump could have a direct impact on UK interest rates—and that means changes for borrowers.
So, what’s going on? And how might this affect you if you’re looking to buy, remortgage, or invest in property?
What’s happened?
Mr Trump has announced a range of tariffs, including a 10% baseline tariff on UK exports to the US and a 25% tariff on foreign-made cars. This move could push up prices globally, creating ripple effects that reach all the way to your mortgage payments.
Ryan Radford, from Expat Mortgage Expert, explains: “Tariffs have a knock-on effect across financial markets. If the cost of goods rises, inflation could follow, and that could influence the Bank of England’s decisions on interest rates.”
Why does this matter for mortgage rates?
The Bank of England uses the base rate to control inflation. If inflation rises due to global events—like tariffs increasing costs—the Bank may decide to keep rates higher for longer.
On the other hand, if tariffs slow down global trade, the Bank might cut interest rates to support economic growth. Either way, uncertainty is the name of the game right now.
As mortgage expert Karen Noye points out: “When the cost of imported goods rises, inflationary pressures often follow. In the US, this could push the Federal Reserve to either raise rates or keep them higher for longer. And what happens in the US often affects the UK.”
What does this mean for UK homeowners and property investors?
If you’re planning to buy or remortgage, the key takeaway is to stay ahead of any changes.
Ryan Radford advises: “If you’re fixed rate is coming to an end and you need to remortgage, it’s worth locking in a deal early. If rates rise, you’ll have secured a lower one. If they fall, you can still look for a better option.”
Simon Jackson from SDL Surveying adds: “The good news is that swap rates, which influence mortgage pricing, have dropped following the announcement. If this continues, lenders might reduce their mortgage rates, making borrowing cheaper.”
Could this be good news for property investors?
While uncertainty can be stressful, it can also bring opportunities. Luther Yeates, head of mortgages at Orton Financial, notes that “rising mortgage costs are keeping more people in the rental market, which could push up demand for rental properties. For landlords, this could mean solid returns in the coming year.”
And for expats looking to buy in the UK? “A stronger pound against the dollar means now might be a great time to remortgage or release equity for an overseas purchase,” says Yeates.
What should you do now?
If you’re in the market for a mortgage or a remortgage, don’t wait until the last minute. Ryan Radford advises: “With so much uncertainty, getting expert advice early could save you thousands. A mortgage broker can help you find the best deal, whether rates go up or down.”
Global politics will always play a role in financial markets, but by staying informed and planning ahead, you can make sure you’re in the best position—whatever happens next.
Contact us today to discuss your own personal situation.