With the annual rate of inflation hitting a new high of 5.5% in January, pressure remains firm on the Bank of England to make further hikes to interest rates during the course of the year.
The Bank has already raised interest rates to 0.5%, which could see homeowners on standard variable rate (SVR) mortgage deals see £656.04* added onto their mortgage payments a year, according to online mortgage broker, Trussle.
Existing Bank rate-linked mortgages, such as base rate trackers, have mirrored the rise while the cost of many new fixed rate deals had already factored it in.
According to Trussle, an increasing number of homeowners are now 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%. From a lender perspective, Santander has revealed that 55% of its new customers took out 5-year fixed-rate deals last year, up from 20% in 2016.
Separate figures published today by the Office for National Statistics (ONS) revealed that average UK house prices increased by10.8% over the year to December 2021, up from 10.7% in November 2021. It puts the average cost of a UK property at £275,000, which is £27,000 higher than in December 2020.
Why are interest rates rising?
The Bank of England’s Monetary Policy Committee (MPC) remains under pressure to cool the economy and reduce soaring inflation. The Consumer Prices Index (CPI) surged ahead by 5.5% in the 12 months to January 2020, marking its highest level for three decades.
And there are fears that inflation could rise as high as 7.5% April 2022 when the energy price cap rises by 54%, resulting in more expensive energy bills for millions of UK households.
What are today’s mortgage rates?
With so much to keep track of and mortgage rates changing often on a daily basis, how can you keep up-to-date? A simple way is by using our mortgage tables, powered by Trussle – a trusted 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:
- Select whether the mortgage is to fund a house purchase or if it’s a remortgage for an existing property
- Enter the property value and the mortgage amount you require. This will automatically generate a percentage which is known as your ‘loan to value’. The lower your loan to value, the cheaper the mortgage rates available
- Tick the relevant box if it’s a buy-to-let or interest-only mortgage (you’ll need a repayment strategy in place for these deals), or if you’re looking for a mortgage to fund a shared ownership property
- Finally, filter your search by the type of mortgage you want, for example a two- or five-year fix or tracker. The filter is set to a complete mortgage term of 25 years but you can change this if required.
What else do I need to know?
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.
When can I start a remortgage?
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.
*Calculation for repayments based on a 2 year fixed mortgage with a 15% deposit (£39,600) using the UK average house price of £264,000.
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