What’s Next? – Forbes Advisor UK

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The Bank of England’s base rate is at a record low of 0.1%. Many commentators expected the Bank to increase it in November, but its unwillingness to do so means all eyes are now firmly fixed on 16 December when the next decision of its Monetary Policy Committee will be announced.

Economists are now suggesting a rise to 0.25% or even 0.5%. Such an increase would not, in itself, have a major immediate impact, but it would signal a significant change in policy. It would also prompt many lenders to increase the rates they charge their mortgage customers.

Rising inflation

The growing prospect of a hike in the base rate is largely down to rising inflation. Official figures show the Consumer Prices Index (CPI) surged ahead by 4.2% in the 12 months to October 2021. It now stands at more than twice the Bank of England’s 2% target, set by the government.

And inflation could continue upwards in 2022, according to the Bank’s deputy governor of monetary policy, Ben Broadbent. Speaking to the Leeds Business School today (6 December), he warned that inflation could ‘comfortably exceed 5%’ by spring, when energy regulator Ofgem is likely to put up the energy price cap (in April 2022). A raise in the cap would mean more expensive energy bills for millions of UK households.

New mortgage deals

However, new mortgage deals have already priced in an increase to interest rates – with the latest inflation report likely to see further hikes in the cost of borrowing even before a rate rise takes place.

That said, the prospect is not yet impacting a particularly buoyant housing market. The major house price indices continue to report month-on-month increases. While, on an annual basis, property values stood 10% higher in October 2021 compared to the same month last year, according to the latest data from Nationwide building society.

What are today’s mortgage rates?

But with 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.

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