What are the cheapest mortgage rates you can get right now?

In the three weeks since the mini budget, mortgage rates have gone up.

According to the latest data, pulled by analysts at Defaqto for This is Money, the cheapest fixed rate in the mainstream mortgage market is 5.34 percent.

That’s for a five-year fixed price for someone buying a home, and they’ll need a 40 percent deposit to get it.

On September 22, the day before the now ousted Finance Minister Kwasi Kwarting delivered the mini-budget, the cheapest rate for someone buying a home in the same circumstances was 3.82 per cent.

On the upswing: Mortgage rates have risen since the Sept. 23 micro budget

Cheapest purchase prices: the mini budget yet
limited period Deposit Best price 22 sep 22 Best price Oct 13 22 % difference Payment difference on a £150,000 loan
Two years 40% 4.06% 5.64% 1.58% £137.43
25% 4.06% 5.69% 1.63% £141.96
10% 3.49% 5.89% 2.40% £204.39
5% 3.99% 6.24% 2.25% £196.60
five years 40% 3.82% 5.34% 1.52% £130.35
25% 3.86% 5.39% 1.53% £131.53
10% 3.98% 5.54% 1.56% £135.06
5% 4.09% 6.24% 1.80% £156.10
Source: Defaqto

Based on a £150,000 mortgage, that means someone buying today would be paying £130.35 more each month than their bill would have been if it had been fixed three weeks ago.

But put this in the context of last year and the difference is even more noticeable. The cheapest rate available on October 18, 2021 would be just 0.98 percent.

A rate increase of 4.36 percentage points would add £342 to the bill based on the same £150,000 loan.

Those with a larger mortgage will pay much more. A borrower with a £300,000 mortgage over 25 years would have paid £1,130 a month a year ago, compared to £1,815 now – that’s £685 in monthly payments.

A year ago, mortgage rates were nearly at their lowest, with the housing market booming, banks keen on lending and cheap borrowing costs due to the Bank of England’s base rate at an all-time low of 0.1 per cent.

This means that equity-rich homebuyers and remortgages who repair their two-year mortgage in 2021 could see the largest increases in their monthly payments when they reach the end of their repairs and need to remortgage.

Many will cross their fingers when prices start to fall in 2023, before they have to refinance.

The rates are still higher for those with less money to put down. Anyone buying a home with a 5 percent deposit could have seen the cheapest available rate rise 3.45 percent in the same year period (from 2.79 percent to 6.24 percent), where rates were much higher a year ago.

Cheapest mortgage rates for home purchases in the past year
limited period Deposit Best price Oct 18 21 Best price Oct 14 22 % difference Payment difference on a £150,000 loan
Two years 40% 1.07% 5.64% 4.57% £366.99
25% 1.19% 5.69% 4.50% £362.99
10% 1.99% 5.89% 3.90% £324.46
5% 2.79% 6.24% 3.45% £293.54
five years 40% 0.98% 5.34% 4.36% £342.12
25% 1.22% 5.39% 4.17% £333.91
10% 2.50% 5.54% 3.04% £252.59
5% 2.99% 5.89% 2.90% £241.12
Source: Defaqto

Those in need of a new mortgage can access updated rates based on their specific circumstances using the This is Money mortgage calculator.

What about those with small deposits?

Although wealthy buyers of stocks saw the biggest hikes last year, those with smaller deposits — often first-time buyers — saw the highest rate hikes since the mini budget.

DeFacto’s research shows that three weeks ago, someone buying a home with a 10 percent deposit and wanting to fix it up for two years could have had an average of 3.49 percent.

Today, the cheapest rate available is 2.40 percentage points higher at 5.89 per cent, meaning those buying today will need to find an extra £204 on the basis of a £150,000 mortgage.

A year ago they might have been offered the cheapest rate at 1.99 per cent, saving them £324 compared to today’s prices.

“When you compare the best two- and five-year fixed-rate mortgages versus this time last year, there have been massive increases across all LTV ranges, to some extent that’s expected since the base,” said Katie Breen, of DeFacto. rate increased.

Unfortunately, the biggest increases seem to be the least in LTV, which doesn’t help those people looking to remortgage right now.

“In general, 2-year flat rates have increased more than 5-year flat rates.

Incredible fixed interest rates of less than 1 percent seem to be a thing of the past, at least for a while.

“Mortgage rates continue to change almost daily, so if consumers find a deal they’re happy with they should act fast.”

Compact: First time buyers will have seen the biggest price hike in the past few weeks

Compact: First time buyers will have seen the biggest price hike in the past few weeks

Two-year repairs are more expensive than five

Another thing that becomes apparent from Defaqto’s research is that fixing your five-year mortgage will be much cheaper than fixing for two years.

Two-year rates have seen larger increases over the past year, with five-year rates jumping to become the most expensive.

For example, a two-year fix on a 25 percent deposit mortgage is up 4.60 percentage points while a five-year fix is ​​up 4.40 percentage points.

Again, the difference is most pronounced in low-deposit loans, with the 5-year deposit purchase mortgage up 3.45 percent a year, and the five-year mortgage up just 2.90 percent.

What to do if you need a mortgage

Borrowers who need to find a mortgage because their existing fixed-rate deal is coming to an end, or because they’ve agreed to buy a home, are urged to act but not panic..

Banks and building societies are still lending and mortgages are still being accepted with applications accepted.

However, rates change quickly, and there is no guarantee that deals will stick and won’t be replaced by mortgages that charge higher rates.

This is Money’s best mortgage rate calculator powered by L&C that can show you deals that match the value of your mortgage and property.

What if I need to re-travel?

Borrowers should compare rates, talk to a mortgage broker, and be prepared to work to secure a rate.

Anyone with a fixed-rate deal that expires within the next six to nine months should consider how much a remortgage will cost now — and consider a new deal.

Most mortgage deals allow a fee to be added to the loan and then only charged when you take it out. By doing this, borrowers can secure a rate without paying expensive arrangement fees.

What if I’m buying a house?

Those who have agreed to buy homes should also aim to lock in prices as early as possible, so they know exactly what their monthly payments will be.

Homebuyers should beware of overexerting themselves and be prepared for the possibility of home prices falling from their current high levels, due to high mortgage rates limiting people’s ability to borrow.

How to compare mortgage costs

The best way to compare mortgage costs and find the right deal for you is to talk to a good broker.

You can use our best mortgage rates calculator to show matching deals for your home value, mortgage size, term needs and flat rates.

Be aware that rates can change quickly, so the advice is that if you need a mortgage to compare rates then speak to a broker as soon as possible, so they can help you find the right mortgage for you.

> Check out the best fixed rate mortgages you can apply for

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