What Now For UK Mortgage Rates? – Forbes Advisor UK – Forbes

April 29, 2022 By admin

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The Forbes Advisor editorial team is independent and objective. To help support our reporting work, and to continue our ability to provide this content for free to our readers, we receive payment from the companies that advertise on the Forbes Advisor site. This comes from two main sources.
First, we provide paid placements to advertisers to present their offers. The payments we receive for those placements affects how and where advertisers’ offers appear on the site. This site does not include all companies or products available within the market.
Second, we also include links to advertisers’ offers in some of our articles. These “affiliate links” may generate income for our site when you click on them. The compensation we receive from advertisers does not influence the recommendations or advice our editorial team provides in our articles or otherwise impact any of the editorial content on Forbes Advisor.
While we work hard to provide accurate and up to date information that we think you will find relevant, Forbes Advisor does not and cannot guarantee that any information provided is complete and makes no representations or warranties in connection thereto, nor to the accuracy or applicability thereof.
The comparison service on our site is provided by Runpath Regulated Services Limited on a non-advised basis. Forbes Advisor has selected Runpath Regulated Services Limited to compare a wide range of loans in a way designed to be the most helpful to the widest variety of readers.
The ever-tightening cost of living crisis and soaring inflation (which stood at 7% in the 12 months to March) is fuelling the likelihood of more interest rate rises this year – putting further pressure on the monthly budgets of millions of mortgaged UK homeowners.
The Bank of England raised interest rates to 0.75% in March, which could add on around £300 a year to a 2.25% variable rate mortgage deal of £200,000. The next interest rate decision by the Bank will be on 5 May.
Existing Bank rate-linked mortgages, such as base rate trackers, will mirror the March rise, while the cost of many new fixed rate deals will have already factored it in. It’s the fourth hike to Bank rate since December 2021, when it stood at just 0.1%.
According to Trussle, our mortgage partner, an increasing number of homeowners are opting for longer-term fixed mortgages in a ‘bid for stability’. It said the initial term length of new fixed rate mortgages being taken by customers has gone up by 17%.
While historically, borrowers would pay more for the longer-term security that a five-year deal offers, Halifax is offering a five-year fixed rate mortgage which is cheaper than its two-year fixed rate equivalent. The ‘no-fee’ five-year fix is priced at 2.82% for borrowers with a 40% deposit, compared to a rate of 2.94% for the same deal over two years. .
As rising house prices and the soaring cost of living apply more pressure on affordabilty, the choice of 95% mortgage deals is growing. First Direct is the most recent entrant into the market (27 April), launching fee-free 2- and 5-year fixed rate deals priced at 2.79% and 2.94% respectively.
The loans will be available up to £550,000 with maximum borrowing terms of 40 years.
Find more on this and other mortgage news on our mortgage updates page.
And for more lenders offering 95% deals and all other loan-to-value mortgages, see our tables below.
The Bank of England’s Monetary Policy Committee (MPC) uses interest hikes as a tool to cool the economy and tame soaring inflation. And the Consumer Prices Index (CPI) measure of inflation surged ahead by 7% in the 12 months to March 2022, marking its highest level for 30 years.
The Office for Budget Responsibility (OBR) had predicted that inflation will peak at 8.7% by this autumn, but this figure could now rise. It reflects both the uncertainty around the Russian invasion of Ukraine, as well as the UK’s energy price cap which climbs in April by 54%, resulting in higher energy bills for millions of households.
The cap will rise again in October, when analysts are forecasting at least a further £500 will be added onto the cost of a typical annual energy bill.
With a frequently-mobile Bank rate and inflation rate, keeping track of mortgage costs is challenging – especially given they can change on a daily basis. One simple way is use our mortgage tables, powered by Trussle – a trusted online mortgage broker and our mortgage partner.
To find out what deals are available at today’s rates for the kind of mortgage you’re after, you’ll need to enter your personal criteria into the table below. Here’s what to do:
Mortgage deals offering the cheapest rates usually come with fees attached. You can opt to pay these upfront or add them to the loan. To factor in the cost of the fee, order your the results by ‘initial period cost’ (in the ‘Sorted by’ dropdown).
Alternatively, you can order results by initial rate, lowest fee or monthly repayment – even by the lender’s ‘follow on’ rate that the deal will revert to at the end of the term.
While mortgage rates change daily, the very cheapest are reserved for bigger deposit amounts, usually of 60% of the property value or more. And in all cases you will need a sufficient income and clean credit history to be accepted for a mortgage.
If you want to see what your monthly mortgage payments might look like in different scenarios while overlaid with household bills, our mortgage calculator will do the sums.
While Trussle lists around 12,000 mortgage deals from 90 lenders – which accounts for the vast majority of the market – occasionally some deals are available exclusively through a handful of brokers, so you may not see these listed.
Mortgage offers from the major lenders tend to last for six months (as set out in our Best Lenders For Remortgaging), although some lenders cap expiry dates at three months. It’s worth looking a new mortgage deal this far in advance as you will be able to lock in a rate you see today – at no cost and with no strings attached.
I've been involved in personal finance and property journalism for the past 20 years, editing websites and writing for national newspapers. My objective has always been to offer no-nonsense information to readers that either saves or earns them cash.

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