What’s next for UK mortgage rates? – Forbes Advisor UK


The Bank of England raised interest rates from 0.1% to 0.25% on December 16.

Lenders, including Nationwide and Santander, have already announced that they will reflect the increase by increasing the cost of mortgage transactions linked to bank rates and their Standard Variable Rate (SVR) lending by 0.15%, effective February 1 2022.

Nationwide’s Base Mortgage Rate (BMR) and Standard Mortgage Rate (SMR) will increase from 0.15% to 2.25% and 3.74% respectively, while Santander’s follow-up rate, which applies to the end of its base rate monitoring transactions will drop to 3.5%. Its standard variable rate will be 4.49%.

Other lenders are expected to follow suit.

Many new fixed rate transactions had already taken into account the rise in interest rates, although more hikes are likely to be expected. Yesterday Nationwide slightly increased the cost of certain two, three and five year fixed rate transactions over a range of deposit levels.

Why has the base rate increased?

The Bank of England’s Monetary Policy Committee (MPC) has come under pressure to cool the economy and curb soaring inflation.

Official figures show that the Consumer Price Index (CPI) jumped 5.1% in the 12 months ending in November 2021, marking its highest level in a decade. Inflation is now well above the double of the Bank of England’s 2% target set by the government.

The Bank of England had previously warned that inflation could “comfortably exceed 5%”, but this was not expected until April 2022, when regulator Ofgem is expected to cap energy prices, which would result in high bills. energy for millions of UK households.

What are the mortgage rates today?

But, with so much to follow and mortgage rates often changing daily, how can you stay up to date? One easy way is to use our mortgage tables, powered by Trussle, a trusted mortgage broker and our mortgage partner.

To find out what offers are available at today’s rates for the type of mortgage you are looking for, you will need to enter your personal criteria in the table below. Here’s what to do:

  • Choose if the mortgage should finance the purchase of a house or if it is a remortgage for an existing property
  • Enter the property value and the mortgage amount you need. This will automatically generate a percentage which is known as a “loan to value”. The lower the value of your loan, the better the available mortgage rates
  • Check the appropriate box if it is a rental or interest-only mortgage (you will need a repayment strategy for these transactions), or if you are looking for a mortgage to finance a shared ownership property
  • Finally, filter your search by type of mortgage you want, say, a fix or a two or five year tracker. The filter is set to a full 25-year mortgage term, but you can change it if needed.

What else do I need to know?

Mortgage offers that offer the cheapest rates usually come with a fee. You can choose to prepay them or add them to the loan. To factor in the cost of the fees, sort your results by “initial period cost” (in the “Sorted by” drop-down list).

Alternatively, you can categorize results by initial rate, lowest fee, or monthly repayment – even by the lender’s “follow-up” rate to which the deal will revert at the end of the term.

While mortgage rates change daily, the cheapest are reserved for larger deposit amounts, typically 60% of the property’s value or more. And in any case, you will need sufficient income and a 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 as they are overlaid on household bills, our mortgage calculator will do the sums.

While Trussle lists around 12,000 mortgage offers from 90 lenders – which is the vast majority of the market – some offers are sometimes available exclusively through a handful of brokers, so you might not see them. not.

When can I start a remortgage?

Mortgage offers from major lenders tend to last six months (as noted in our Best Lenders for Remortgage), although some lenders cap expiration dates at three months. It’s worth looking for a new mortgage contract so far in advance, as you will be able to lock in a rate you see today – at no cost and with no strings attached.


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