The Bank of England announced on 11th May 2023 the 12th consecutive base rate increase to 4.5%  With the publicity on increasing interest rates, a lot of people are concerned with how this will affect their personal finances and mortgage.

The base rate increase is due to the high level of inflation in the UK which currently sits around 10% with the target being 2%. It is important for the UK to curb this inflation to ensure the long term stability for the country.

In this article we will discuss the current best mortgage deals as of today and the forecast for interest rates based on our research of the mortgage market.

Who is offering the best mortgage rates UK?/ Which bank has the best remortgage rates UK?

The best mortgage deals will depend on your mortgage size, loan to value and also various factors such as your affordability and any personal factors that affect lenders available to you. Lenders will lower their interest rates in the market that they would like to target at that time. At Willow Brook Mortgages we have access to over 100 lenders so our independent mortgage advisors will be able to research the market for your exact circumstances to ensure they find you the best mortgage rate at the point of you applying. We also offer a free rate check facility which means that at any point before you complete on your mortgage, you can call up your advisor to check it is still the best mortgage deal for you. If there is a better interest rate available, they can discuss changing this over for you.

What is the average 5 year fixed mortgage rate today UK?

As discussed above the best interest rate will depend on a lot of other factors. Below gives you an idea of the best mortgages rates for different scenarios currently;

Based on a mortgage of £200,000 at 90% loan to value the best mortgage deal currently is 4.59% with Clydesdale bank.

A mortgage of £200,000 at 85% loan to value currently on the best 5 year fixed interest rate would be 4.40% with Clydesdale bank for the best remortgage deal.

When looking at a remortgage of £200,000 at 75% loan to value or below the best mortgage rate today would be Monmouthshire at 4.1%.

What is the average 3 year fixed mortgage rate today UK?

When looking at the market today for a 3 year fixed rate remortgage of £200,000 at 90% loan to value, the best mortgage product is 4.99% with Digital mortgages.

A mortgage of £200,000 at 85% loan to value currently on the best 3 year fixed interest rate would be 4.53% with Clydesdale for the best remortgage deal.

When looking at a remortgage of £200,000 at 75% loan to value or below the best mortgage rate today would be Monmouthshire at 4.34%, with a £999 arrangement fee with Nationwide building society.

What is the average 2 year fixed mortgage rate today UK?

For a 2 year fixed interest rate when looking at a mortgage of £200,000 remortgaging at 90% loan to value, the best mortgage deal is currently 4.95% with Furness building society.

If you have a loan to value of 85% or below you would currently be looking at a 2 year fixed rate of 4.9% with Clydesdale.

Increasing the equity to a 75% loan to value or below brings the best mortgage deal down to 4.54% with a £999 arrangement fee with Natwest.

Can you get a 4 year fixed rate mortgage?

Most mortgage rates available are for 2 year fixed interest rate mortgages and 5 year products. There are some lenders and products who are also competitive in the 3 year fixed rate market but this is a bit more limited. Most lenders will have a set end date for everyone who takes out the same product which means that the timeframe you have on your product will vary on when you start the product. For example everyone applying for a mortgage now takes a product with a lender that is a 2 year fixed rate with an end date of 01/07/2025. If you complete on this product at the end of the month you would get 25 months on the product. Comparatively if your remortgage is due in August then you would complete in August and only get 23 months on the product. 4 year fixed rate mortgages aren’t usually available, however with the end dates on a 3 year or 5 year fixed rate you could get close to a 4 year mortgage.

Will mortgage rates go down in 2023 UK?

The bank of England base rate has increased for the 12th consecutive meeting in an effort to reduce the level of inflation in the UK. With inflation currently sitting around 10% and a target of 2%, it is difficult to predict how high the interest rates will need to reach for this to take affect. The current predictions look to be that the interest rates will remain higher through 2023. It is impossible to predict how high interest rates will get to and how long this will take to reduce inflation as this is based on peoples behaviours and reaction to the changes.

What is the base rate for Bank of England remortgage?

The Bank of England base rate is currently 4.5%. If you’re on a variable interest rate that tracks the bank of England base rate, this would be based on 4.5%. Lenders will also hold their own standard variable rate which you would usually revert to once your current mortgage deal ends. You can check your lenders current standard variable rate by clicking here

 

Date published – 15/05/2023