How are they preparing for market challenges following Trump's tariffs?
As the fallout from Donald Trump’s import tariffs continues to take its toll, the Bank of England has warned that risks of a hit to the global economy and further sharp falls in financial markets have grown. The Bank’s Financial Policy Committee said that uncertainty had intensified and the growth outlook had weakened.
“The probability of adverse events, and the potential severity of their impact, has risen,” the committee reported. “As the UK is an open economy with a large financial sector, global risks are particularly relevant to UK financial stability.” It added: “A major shift in the nature and predictability of global trading arrangements could harm financial stability by depressing growth.”
The BoE committee acknowledged a reduction in global co-operation in tackling international challenges and shocks, which could reduce the resilience of the financial system. But noting that the Britain’s banking sector is well capitalised, it added: “The UK banking system has the capacity to support households and businesses, even if economic and financial conditions were to be substantially worse than expected.”
This isn’t, of course, the most inspiring dispatch from the Bank, and suggests – as if we didn’t know it – that there is cause for concern, but how worried are mortgage brokers by this appraisal and how are they planning to navigate any bumps in the road over the next few months?
“The Bank of England’s warning is certainly something to take seriously, but we’ve seen global uncertainty before,” said Ajay Nayyar (pictured left), owner and managing director of Hearthstone Mortgages. “Whether it’s Trump’s tariffs, banking wobbles, or bond market swings, these things tend to come in waves. What matters most is how we steady the ship. At Hearthstone, we’re not in panic mode, we’re in preparation mode. We’re advising clients more conservatively, closely watching lender criteria shifts, and stress-testing deals with wider margins. Our developer and investor clients are also being encouraged to plan for rate movements and cashflow contingencies.”
He added: “That said, one thing that’s flown a bit under the radar is the continued fall in SONIA (Sterling Overnight Indexed Average) swap rates throughout this period of trade war rhetoric. If that trend continues, mortgage rates may well keep falling. While the headlines are dramatic, the swap curve is quietly telling a more positive story for borrowers - at least for now. So, no, I’m not overly worried - but I’m definitely watching everything like a hawk. Those a tad more negative in this industry will no doubt say the complete opposite, of course.”
Read more: How are the Stamp Duty changes impacting the mortgage market?
How are brokers’ clients responding?
Broker Graham Lock (pictured centre), from Lock and Key Mortgages, reports increased communication from his clients. “This is certainly making waves, and the news has prompted mixed reactions among customers, with quite a few calls and emails over last 48 hours,” Lock said. “Many customers are now interpreting there will be a significant drop in rates to sustain momentum. It makes me think back to when we've weathered similar periods before, through the EU referendum, Brexit, and elections.”
Lock’s advice to clients is that if they have a mortgage deal set to expire within the next three to six months, he can secure a deal early and monitor it closely to get ‘the best of both worlds’. This means securing a new deal, but if it drops then swapping it for a cheaper option. “For those clients planning to move or for first-time buyers, we're incorporating buffers, managing expectations, and working estimates with rates as they are but also higher and lower so we have a balanced view,” he said. “In the recent years I’ve found personal circumstances and preferences consistently steer individual decisions so people’s desire to move isn’t going to be dampened. Interestingly, we've seen a noticeable uptick in first-time buyer enquiries, which is encouraging.”
Meanwhile, Richard Campo (pictured right), head of growth at Heron Financial, prefers not to dwell too much on what might be. “I’ve never been one for ruminating over the macroeconomic environment,” Campo declared. “We have no sway over that and in most cases, very little understanding of what drives it or what the outcomes are likely to be. In recent times the biggest shocks to the economy - COVID, Truss and Russia invading Ukraine etc - no-one predicted, so you would be a brave man indeed to try and predict the outcome of this round of tariffs from the USA, and likely outcomes. From an advice perspective, all you can do is pull back and look at what history teaches us in order to try and make the best calls today.”
He continued: “So, specifically, when you get a round of stock market falls or crashes, central banks typically cut rates to help companies through that period and stimulate spending and borrowing which helps bolster the market. Money markets have certainly responded to that view as the two-year SONIA is down around 0.25% since last week, indicating the BoE will cut rates three times this year as opposed to the expected two, with further cuts next year now expected. I wouldn’t rule out a 0.5% cut in May if stock market chaos persists.”
Logically, Campo suggests, the thing to do would be to take a variable rate on an active application. “Perversely clients are less inclined to go for a more ‘risky’ product at times of uncertainty even if the likely outcome is rates to fall faster,” he said. “We have seen appetite for variable rates increase this year, even before the tariff madness. In Q1 2024, 8% of our clients took variable rates, whereas in Q1 in 2025 that had nearly doubled to 13% and I expect that trend to continue. So, in part, that is how we are managing this period by explaining this is a very viable product right now. Typically variable rates are penalty free so you can exit if things go the other way, or switch to a fixed rate should a better one become available next year, which at the moment looks likely and I think hence the appeal. An overwhelming majority of clients - 87% - still opt for the safety of a fixed rate. There is also a swing toward taking two-year fixed rates as the logic is when you come to refinance a lot of this nonsense will have washed out and you can refinance onto a lower rate. Let’s hope that happens.”
He concluded: “That largely sums up mortgages, we aren’t traders, economists or fortune tellers. For most clients a mortgage is their largest financial commitment, so keeping a calm head at times like this is essential. I have always lived by a simple rule – only worry about what you can control. I can’t control financial markets but I can control my reaction to periods like this - keeping a level head, focusing on my clients and working in their best interests. That is all you ever can do, and at times like this it is more important than ever to focus on that simple life rule.”
