With interest rates expected to fall slightly over the next year or so, many buyers are asking the same question: is it better to wait or buy now? On the surface, waiting for a lower mortgage rate sounds like a smart financial move. But when you dig into the numbers, it becomes clear that waiting could cost you more, sometimes thousands more.
What Does Waiting Really Cost?
Let’s assume you're buying a home at £465,000 with a 25% deposit, and interest rates fall slightly (by 0.3%–0.5%). Here's how things change if prices rise by 3%–5%:
Price Increase | New Property Value | Monthly Mortgage (est.) | 25% Deposit | LBTT Due (Est.) | Total Extra Cost |
0% (Buy Now) | £465,000 | £1,884 | £116,250 | £13,100 | £0 |
3% | £478,950 | £1,876 | £119,738 | £14,048 | £3,536+ |
4% | £483,600 | £1,894 | £120,900 | £14,423 | £5,023+ |
5% | £488,250 | £1,913 | £122,063 | £14,798 | £6,698+ |
Even if your mortgage rate improves slightly, you’ll still need £3,488 to £5,813 more in deposit, and pay £948 to £1,698 more in LBTT, depending on how much prices rise.
Lower rates often increase buyer demand, pushing prices up. So even if borrowing becomes a bit cheaper, you'll be paying more for the property itself and as we see in the table above need a larger deposit. You could also end up with a higher monthly payment, depending on how rates and prices move together.
Mortgages have been declining gradually since 2023, but the movement has been slow and steady. While another base rate cut is expected later this year, most lenders have already priced that in. Even with a couple of small reductions forecast next year, rates are only expected to drop by around 0.3 percent over the next 12 to 18 months.
Buying now could indeed be smarter, even though it might seem logical to wait. Any benefit from a small drop in interest rates is likely to be outweighed by rising home prices and higher deposit requirements. If you’re financially ready, buying now could save you money in the long run.
To speak to one of our Mortgage Advisers about a Joint Borrower Sole Proprietor mortgage, you can book an appointment directly, or call us on 03301 759 977.