How easy is it to make mortgage rate predictions for 2012?

Mortgage rate predictions for 2012 are becoming increasingly difficult to call despite the fact there has been increased year-on-year mortgage lending for the past 7 months. The mortgage market is showing it's self to robust but recovery is slow.

It is however proving less than easy to make mortgage rate predictions for 2012 with any level of accuracy other than to say mortgage rates could rise in line with wholesale funding costs.

The fact that lending figures have increased for the last 7 consecutive months may suggest that lenders are now becoming acclimatised to the constrained funding environment.

For the past 3 to 4 months there has been a noticeable improvement in the number of first time buyer purchases, as first timers rush to buy to avoid missing out on the stamp duty holiday. It is anticipated that if mortgage lending maintains it present levels now that the stamp duty concession has ended, it will provide evidence that the market has stabilised.

The market could potentially flatten now the concession has ended but the CML say the Government's New Buy scheme is reason for optimism.

Improvement in mortgage availability at higher LTVs, may make the housing market far more buoyant than this time last year.

SVRs are going up but until the dust settles and the rate increases come into effect in May, longer term mortgage rate predictions for 2012 will be just best guesses.

Even though rates are rising mortgages are historically cheap, and therefore we at Deal Direct recommend that would-be buyers and those looking for a remortgage deal make a move now and search for a competitive rate.