Mortgage Matters - What effect has interest rate rises had on the best mortgage deals available
Following much speculation, the Bank of England raised the interest rate again on March 17 taking it to 0.75%. So, it comes as little surprise that mortgage rates have shot up again compared to this time a month ago. However, it isn’t all bad news because, while rates are on the up, there are still some good deals available.
Best mortgage rates April 2022
Following much speculation the Bank of England raised the interest rate again on March 17 taking it to 0.75%; the third increase since December 2021. So it comes as little surprise that mortgage rates have shot up again compared to this time a month ago. We’ve seen increases across the board and there’s nothing to indicate mortgage rates are likely to go down any time soon. In fact some experts are predicting the interest rate will continue to rise and reach over 2% by next February which would have a major impact on mortgage rates.
However it isn’t all bad news because while rates are on the up there are still some good deals available. But it’s a good idea to move quickly as these could disappear.
Best 2 year fixed rate mortgage
The lowest rate on a 2 year fix is from Lloyds Bank at 1.85%. You’ll need a deposit of 40% or more however it’s only available for remortgages. And if you’re buying a house, Barclays offers the lowest rate on a 2 year fix at 1.89%. You’ll need a 45% deposit and it has an arrangement fee of £749.
This is quite a leap from the lowest rate on a 2 year fix that was available last month which was from Barclays at 1.49%. You would have needed a 40% deposit and it had an arrangement fee of £999. It was available for purchases and if were remortgaging.
Best 3 year fixed rate mortgage
While for a 3 year fixed deal the lowest rate is with Metro Bank at 2.09%. You’ll need a 25% deposit and it has an arrangement fee of £999. And it’s available for remortgages and purchases. Last month the lowest rate on a 3 year fix was with Nationwide at 1.79%. You would have needed at least a 40% deposit, it had an arrangement fee of £999 and was available for remortgages and purchases.
Best 5 year fixed rate mortgage
With 5 year fixes, there’s quite a stark difference in the lowest rate available depending on whether you’re purchasing a house or remortgaging. The lowest rate on a 5 year fix if you’re remortgaging is with Lloyds at 1.86%, you’ll need a deposit of 40% and it has an arrangement fee of £999. Interestingly this is lower than the lowest available rate on a 3 year fix this month, although the deposit required is 40% with this deal compared to 25% for the Metro 3 year fix. However it’s still quite a leap from the best rate available on a 5 year fix last month which was also with Lloyds Bank at 1.66%, with the same 40% deposit requirement and arrangement fee.
While if you’re buying a house the lowest rate available on a 5 year fix is 2.04%. Two lenders offer this rate: NatWest; where you’ll need at least a 25% deposit, it has an arrangement fee of £995 and £250 cashback. Santander also offers this rate; you’ll need a 40% deposit and it has an arrangement fee of £999. Again this rate is lower than the best available rate on a 3 year fix.
Last month the lowest rate available on a 5 year fix if you were buying a house was 1.74%. This was available from Leeds Building Society and required a 40% deposit. Plus it had an arrangement fee of £1,999. First Direct also offered the same rate; you would have also needed a 40% deposit and it had a booking fee of £490.
Best variable rate mortgages
The lowest rate on a variable rate mortgage is the Furness Building Society’s 2 Year Discount at 1.09%. This is a 4.55% discount off its Mortgage Variable Rate. You’ll need a 20% deposit and it has a product fee of £999. Last month the lowest rate was also available with Furness Building Society– it offered a 2 year discount of 4.65% off its Mortgage Variable Rate and last month the initial rate on that product was 0.89%. You would have needed a 40% deposit and it had a product fee of £1699.
Best Help to Buy mortgage rates
If you’re looking for a Help to Buy Mortgage, Barclays still offers the lowest rates on 2 year fixes. Barclays offers the 2 year Fixed London Help to Buy Equity Loan Scheme mortgage at 1.89%. It has an arrangement fee of £749. This is quite a jump from last month when this rate stood at 1.41%.
While if you’re not in London, Barclays offers the 2 Year Fixed Help to Buy Equity Loan Scheme mortgage at 1.99%. It also has a £749 arrangement fee. This is up from 1.63% last month.
Green mortgage rates
And if you’re planning to do work to improve your home’s energy efficiency then you might be interested in finding out about Coventry Building Society’s Green Together Reward. If you take out a mortgage when buying a house, or you remortgage or you take out a buy-to-let mortgage with the lender and then spend at least £2,500 with a TrustMark registered business making qualifying energy-efficiency improvements you can apply for £500 cashback.
It’s available on all products subject to meeting the eligibility of the type of works that fall in the scope of the scheme such as insulation and solar panels.
If you require funds to buy a property or for home improvements then this is where speaking to an independent expert broker can find you the best solution. If you'd like some advice on mortgages or if you are looking for a mortgage for your next property purchase please let us know HERE and one of the team from Stannard McMahon will be in touch.