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Mortgage Rates

What next for mortgage rates: October sees a spate of rate rises as experts warn the best deals are about to dry up

  • This is Money's long-running mortgage rates round-up looks at the best deals and what you need to consider when looking for a home loan
  • We round-up the best fixed rate and tracker rate mortgages
  • Check the top deal for your situation with our mortgage calculator tool 

More than 20 lenders have hiked their mortgage rates in the past month as fears of an imminent rise in the base rate grow, prompting experts to call time on record low cost homeloans.

Barclays, Halifax, digital bank Atom, NatWest and building societies Nationwide, Skipton and West Bromwich have all increased the cost of their mortgage deals in the past week.

The average two-year fixed rate has bumped up 0.04 per cent to 2.24 per cent since 1 October, according to data from Moneyfacts.

It marks a turnaround in the direction of travel for the cost of mortgages, which have been at rock bottom for more than a year. 

It's still possible to secure a two-year fixed rate under 1 per cent, but these eye-catching deals aren't likely to be around for much longer. 

Swap rates - used by lenders as a factor in pricing mortgage rates - have risen following increasingly insistent warnings from the Bank of England that a base rate rise is likely to come sooner rather than later. 

Concern over mounting levels of consumer debt and persistently above target inflation are both piling on the pressure to lift the base rate from its historic low of 0.25 per cent.

Markets are now expecting a rise to come far sooner than expected, with some economists predicting that the Monetary Policy Committee could vote for a hike at its November meeting. 

Home owners are being offered the chance to lock into record low fixed rates

For now, rates remain at their lowest ever - even for those with smaller deposits.

Top of the table is a 0.99 per cent two-year fixed rate from Yorkshire Building Society which comes with a £1,495 fee and is available to those with a 25 per cent deposit or equity to put in.

About what next for mortgage rates? 

This is our long-running mortgage rates round-up that looks at the mortgage market and what to consider when looking for a loan. 

It has been running for more than five years and is regularly updated.

Older reader comments are left in place, so people can see what was being said in the past.

The best of the rest of the two-year fixes for those with big deposits come in at just above 1 per cent. 

Those looking for longer term security in the form of a five-year fix can trade that for a slightly higher rate of around 1.6 per cent from a slew of lenders including Sainsbury's Bank, Yorkshire Building Society and HSBC.

Even those with a 10 per cent deposit can access historically very low rates. The Co-operative Bank has a two-year fix at 1.79 per cent for them, while Chelsea Building Society offers 1.83 per cent.

Over five years they can fix at 2.45 per cent with Hanley Economic Building Society and 2.49 per cent with Co-op.

The very best and cheapest deals on offer are for those with a substantial whack of equity to put in but there are competitive rates across the board, even for those with just a 5 per cent deposit.

It's therefore worth thinking about remortgaging if you've come to the end of your deal and are sitting on your lender's standard variable rate. 

These rates average at around 4.75 per cent - considerably higher than the competitive rates available for newer deals. 

What are the best mortgage deals? 

The attraction of a two-year fix may be lower rates now and extra flexibility, but that comes at the expense of needing to remortgage in two years to avoid slipping onto a more expensive standard variable rate.

And with the base rate at just 0.25 per cent, there is really only one direction for rates to go in future - up. A five-year fix gives the opportunity to lock into a low rate for a longer period and avoid extra fees and higher rates in a relatively short time.  

Unless you have a good reason to take a two-year fixed rate, such as needing to move or expecting to have to sell your home, brokers have suggested that five-year fixed rates might be a cheaper long-term bet.

Even if the base rates stays low, if lenders are worried about the effect of Brexit, they are likely to make it harder for borrowers to get a mortgage by making their affordability and income tests harder to pass.

Whatever the right type of mortgage for your circumstances, shopping around and speaking to a good mortgage broker is a wise move.  

Borrowers should have a quick look at the rates below, these are regularly updated by This is Money's mortgage team. If you spot a deal you think has been pulled or should be in there, email us via editor@thisismoney.co.uk with mortgage rates in the subject field

Best fixed rate mortgage deals

Bigger deposit mortgages

Five-year fixed rate mortgages

Yorkshire Building Society has a five-year fixed rate mortgage at 1.55 per cent with £1,700 fees at 65% loan-to-value

HSBC has a five-year fixed rate mortgage at 1.59 per cent with £999 fees at 60% loan-to-value

Sainsbury's Bank has a five-year fixed rate mortgage at 1.59 per cent with £745 fees at 60% loan-to-value

Two-year fixed rate mortgages

YBS has a two-year fixed rate mortgage at 1.09 per cent with £245 fees at 65% loan-to-value

Sainsbury’s Bank has a two-year fixed rate mortgage at 1.09 per cent with £745 fees at 60% loan-to-value

Mid-range deposit mortgages

Five-year fixed rate mortgages

Sainsbury's has a five-year fixed rate mortgage at 1.69 per cent with £745 fees at 75% loan-to-value

Co-op Bank has a five-year fixed rate mortgage at 1.74 per cent with £1,754 fees at 75% loan-to-value

HSBC has a five-year fixed rate mortgage at 1.74 per cent with £999 fees at 75% loan-to-value

Two-year fixed rate mortgages

YBS has a two-year fixed rate mortgage at 0.99 per cent with £1,495 fees at 75% loan-to-value 

Hanley Economic has a two-year fixed rate mortgage at 1.12 per cent with £745 fees at 75% loan-to-value

YBS has a two-year fixed rate mortgage at 1.13 per cent with £1,200 fees at 75% loan-to-value

Smaller deposit mortgages

Five-year fixed rate mortgages

Hanley Economic has a five-year fixed rate mortgage at 2.45 per cent with £999 fees at 90% loan-to-value

YBS also has a five-year fixed rate mortgage at 2.49 per cent with £1,200 fees at 90% loan-to-value

Co-op Bank has a five-year fixed rate mortgage at 2.49 per cent with £1,754 fees at 90% loan-to-value

Two-year fixed rate mortgages

Co-op Bank has a two-year fixed rate mortgage at 1.79 per cent with £1,754 fees at 90% loan-to-value

YBS has a two-year fixed rate mortgage at 1.89 per cent with £1,900 fees at 90% loan-to-value

Chelsea BS has a two-year fixed rate mortgage at 1.83 per cent with £1,900 fees at 90% loan-to-value

Best tracker rate mortgages 

A note on rates 

 Rates can change on mortgages at short notice and sadly lenders do not always inform us when they alter them (especially if they raise rates rather than lower them). 

This can lead to occasions when the rates listed here are not available. If you ever spot this situation - or a good rate we have not listed - please email editor@thisismoney.co.uk with mortgage rates in the subject line and we will update the round-up asap


simon lambert

Fix now?

27.10.17

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