UK Mortgage Rates: What Happens Next?

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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. And it would also prompt many lenders to increase the rates they charge their mortgage customers.

Rising inflation

The prospect of a rise in the base rate next month is now closer to certain following the release of the latest official inflation figures, which showed the Consumer Price Index (CPI) surged ahead by 4.2% in the 12 months to October 2021. This follows a 3.1% rise recorded in September and is the highest 12-month inflation rate since November 2011, when CPI stood at 4.8%.

The figure is also more than twice the Bank of England’s 2% target, set by the government. Soaring energy bills (the price cap on many domestic tariffs rose by 12% on 1 October), higher pump prices on garage forecourts and the rising cost of raw materials are cited as the cause for the increase – the highest since inflation hit 4.8% in November 2011.

New mortgage deals have already priced in an increase to base rate – and the latest inflation figures are likely to see further hikes in the cost of borrowing even before a rate rise takes place. The Bank itself has said current indicators suggest that interest rates could reach 1% by the end of 2022.

But the prospect is not yet impacting what is a particularly buoyant housing market. The major house price indices all continue to report month-on-month increases, while the latest Homemover Review from Halifax found that the number of people moving home more than doubled (132%) to 265,070 in the first half of 2021, compared to the same period last year.

What are today’s mortgage rates?

However, 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.