Mortgage rates unlikely to return to low levels, says Lloyds boss

High interest rates can affect people in different ways. Mortgage holders with variable or tracker mortgages, or those who are looking to secure new fixed-rate deals, have faced higher monthly payments.

But first-time home buyers looking to get on the market have found it more difficult to get onto the ladder, being priced out as it’s become harder to secure an affordable deal.

An estimated 1.6 million existing borrowers have relatively cheap fixed-rate deals expiring this year.

The UK’s base interest rate, which dictates the borrowing costs charged by banks and building societies on loans, is currently 5%.

The rate was held at its current level last month, with decision makers arguing they needed to be sure inflation, which measures the rate consumer prices are rising at over time, was remaining at normal levels.

Mr Nunn said while there were many parts of the UK “continuing to struggle” due to the cost of living, 2024 had marked “the turn that we have seen in terms of most people in the country feeling more financially secure”.

“For most people it has got a lot better,” he said. “There is more savings in deposit accounts, there’s less people struggling with loans and actually business confidence is at a nine-year high.”