Some mortgage rates have jumped following yesterday's budget announcement, with many lenders beginning to increase the fixed deals they offer to customers. But, there may be better news on the horizon as markets stabilise, say experts.

Peter Stimson, Head of Product at MPowered Mortgages, says: "The post-Budget ripples are already being felt across the mortgage market. Within hours of the Chancellor’s speech, swap rates - which are essentially the wholesale cost of fixed rate money for lenders - were up by around 0.2%."

As a result, some mortgage lenders have already begun to increase the fixed rates they offer to new customers.

“The combination of more expensive mortgages, plus the additional Stamp Duty which from today will be charged on second homes and buy-to-let properties, could have a severe chilling effect on the buy-to-let sector and we could see thousands of purchases abandoned as a result," says Peter.

"While the Bank of England is still widely expected to reduce its Base Rate next Thursday, the benefit of this will be felt by only a fraction of mortgage borrowers - those with a variable rate loan. 98% of new mortgages taken out have a fixed rate of interest, and these rates will be kept higher for longer because of rising swap rates."

Those expecting that a cut from the Bank of England next week to rates will herald a cheaper mortgages may be disappointed, at least in the short term. But, the positive news is that the first Labour budget in 14 years has seen nowhere near the rises households faced following the Liz Truss mini budget, and many buyers may have more money in their pockets following increases in national minimum wage figures. 

"While we can’t know for sure, mortgage rates on new fixed deals have been declining recently, now comparable to or even lower than levels before the mini-Budget during Liz Truss's tenure," says Raj Chohan, owner of Golden Key Estates and  The Apprentice 2024 candidate.

"It's forecast that the bank rate may continue to decrease, though not as quickly or significantly as once predicted due to government spending pressures," she says.

There are also issues facing buy-to-let investors, and those looking for second homes.

"For buy-to-let properties, the increase in stamp duty surcharge from 3% to 5% on second homes in England and Northern Ireland could deter some landlords from purchasing, potentially limiting rental supply and raising rents," she says. "This shift aims to improve opportunities for first-time home buyers."