The Trade War Tug-of-War: What It Means for Your Mortgage Rate

If you’ve been keeping an eye on the headlines lately, you may have noticed a growing buzz around the term “trade war.” But what does this global game of economic tug-of-war mean for you — especially if you’re planning to buy a home, remortgage, or lock in a new fixed rate?

Let’s break it down…

What’s Happening With the Trade War?

Right now, tensions are flaring between some of the world’s largest economies — particularly between the U.S. and China — over tariffs, exports, and global dominance in areas like technology and manufacturing. We’re seeing tit-for-tat measures: the U.S. slaps tariffs on Chinese goods, and China responds with its own set of restrictions. Similar rumblings are happening between the EU and China too, with concerns around subsidies and underpriced exports.

This creates uncertainty in global markets — and financial markets hate uncertainty.

So How Does This Affect Mortgage Rates?

Here’s the interesting bit. Trade wars can lead to a slowdown in global economic growth. When this happens, central banks — including the Bank of England — often consider lowering interest rates or holding them steady to stimulate the economy.

Here’s the potential impact:

• Slower growth = lower inflation: If inflation cools down, it could ease pressure on the Bank of England to raise interest rates.
• Investors seek ‘safe haven’ assets: In turbulent times, money tends to flow into bonds and government securities, which drives yields down — and mortgage rates often follow.

What Could Happen Next?

If the trade war continues to rattle markets, we might see:

• Mortgage rates staying low for longer than previously expected.
• Pressure easing on fixed rates — especially if lenders expect the Bank of England to hold back from rate hikes.
• Opportunities for remortgaging or locking in competitive deals — especially for borrowers with strong credit and equity.
  But it’s not a one-way street. If tensions escalate too far and inflation spikes due to supply chain issues (think back to 2021), we could see the reverse: a renewed push to raise interest rates to combat rising prices.

What Should You Do If You’re Thinking About a Mortgage

Now is a great time to review your options. Whether you’re buying, remortgaging, or simply keeping an eye on things, staying informed can help you make smart, timely decisions.

At The Residential Mortgage Hub, we’re keeping our ear to the ground, monitoring how global events shape local rates — so you don’t have to.

Want to know how today’s market affects your personal situation?

Let’s chat. We’ll look at your goals and help you lock in a deal that makes sense — whatever the world throws at us next.