BoE Base Rate Increase AGAIN to Highest Level Since 2008. But What Does that Mean for Mortgages?
We take a quick look what the latest base rate increase means for mortgages.
Following the news today about the BoE (Bank of England) Base Rate increasing again by 0.25% to 4.5% to tackle inflation, it's important to understand what the means for the mortgage market.
Since 18th April, when the CPI (Consumer Price Index) reduced from 10.4% year on year to 10.1% instead of the expected 9.8%, the banks have been expecting the base rate to increase and therefore we have seen a slight increase in interest rates as a consequence of this. However, what we have witnessed is marginal, with many increases still lower than the 0.25% increase to base rate.
For example, Santander, who have been one of the banks offering the lowest interest rates of late, have confirmed increases to selected residential fixed rate products by between 0.03% and 0.22%, with zero change to buy to let rates on new business & by between 0.04% and 0.21% on product transfers, again no change to buy to let products.
Of course, this is likely to have a much bigger impact to those on tracker mortgages, however, with some of the best fixed rates still lower than the base rate, it signifies that the banks are expecting the base rate to eventually drop.
Here are some of the best interest rates available:
3.90% on a 5 Year Fixed (60% LTV)
4.42% on a 5 Year Fixed (90 LTV)
4.26% on a 5 Year Fixed (85% LTV)
4.27% on a 2 Year Fixed (60% LTV)
4.73% on a 2 Year Fixed (90% LTV)
(These rates are accurate at the time of writing this blog on 11th May 2023 and are all subject to product fees from the lenders.)
If you have any questions relating to your mortgage or are looking to obtain a new mortgage, whether it be to re-finance your home or purchase a new property, please get in touch and we can put you in touch with our mortgage broker, Ben, who will be able to give you the advice you need to make an informed decision.
Thanks for reading and have a great day.
Aaron
ps. this blog does not constitute financial advice and is for informational purposes only.