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

In the three weeks since the mini-budget, mortgage rates have skyrocketed.

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

That’s for a five-year flat rate for someone buying a home, and you’ll need a 40 percent down payment to get it.

On September 22, the day before the now-ousted Foreign Minister Kwasi Kwarteng delivered the mini-budget, the lowest rate for someone buying a house under the same circumstances was 3.82 percent.

Rising: Mortgage rates have been rising since the mini-Budget on September 23

CHEAPEST RATES FOR SHOPPING: MINI-BUDGET SO FAR
fixed period Deposit Best Rate 22 Sept 22 Best rate 13 Oct 22 % difference Payment difference on loan of £150,000
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: Default

Based on a £150,000 mortgage, that means someone buying today would pay an extra £130.35 each month compared to what their bill would have been if they had fixed three weeks ago.

But put that in the context of a year ago and the difference is even starker. The cheapest rate available on October 18, 2021 would have been just 0.98 percent.

The 4.36 percentage point rate increase will add £342 to the bill based on the same £150,000 loan.

Those with larger mortgages will pay much more. A borrower with a £300,000 mortgage for 25 years would have paid £1,130 a month a year ago, compared to £1,815 now, a difference of £685 a month in payments.

A year ago, mortgage rates were at near record lows, with the housing market booming, banks willing to lend and borrowing costs low as the Bank of England base rate was at a record low. of 0.1 percent.

This means that equity-rich homebuyers and borrowers who fixed their mortgage for two years in 2021 may see the biggest increases in their monthly payments when they reach the end of their arrangements and need to remortgage.

Many will cross their fingers that rates start to drop in 2023, before they have to refinance.

The rates are even higher for those who have less money to deposit. Someone buying a house with a 5 percent deposit would have seen the cheapest available rate increase by 3.45 percent in the same one-year period (from 2.79 percent to 6.24 percent), since rates a year ago were substantially higher.

THE CHEAPEST MORTGAGE RATES FOR HOME PURCHASE IN THE LAST YEAR
fixed period Deposit Best rate 18 Oct 21 Best price 14 Oct 22 % difference Payment difference on loan of £150,000
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: Default

Those who need a new mortgage can access updated rates based on their own circumstances using This is Money’s mortgage calculator.

What about those with smaller deposits?

While wealthy stock buyers have seen the biggest increases in the past year, those with the smallest deposits, often first-time buyers, have seen the steepest rate increases since the mini-Budget.

Defaqto’s research shows that three weeks ago, someone who bought a house with a 10 percent down payment and wanted to fix it up for two years could have gotten a rate of 3.49 percent.

Today the cheapest rate available is 2.40 percentage points higher than 5.89%, meaning those buying today will have to find an additional £204 based on a £150,000 mortgage.

A year ago they may have been offered the cheapest rate of 1.99 per cent, saving them £324 compared to current prices.

Defaqto’s Katie Brain said: “When you compare the best 2 and 5 year fixed rate mortgages to last year there have been massive increases across all bands of LTV, to some degree this is to be expected from the bottom up. rate has increased.

‘Unfortunately, the biggest increases appear to be the lower LTVs, which doesn’t help those looking to re-mortgage right now.

‘In general, 2-year fixed rates have increased more than 5-year fixed rates.

‘It seems that spectacular fixed interest rates below 1 percent are a thing of the past, at least for a while.

“Mortgage interest rates continue to change on an almost daily basis, so if consumers have found a deal, they are happy they should act quickly.”

Squeezed: First-time buyers will have seen the biggest rate hikes in recent weeks

Squeezed: First-time buyers will have seen the biggest rate hikes in recent weeks

Two-year fixes more expensive than five

Another thing that becomes clear from Defaqto’s research is that fixing your mortgage for five years will be substantially cheaper than doing it for two.

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

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

Again, the difference is starkest on low-deposit loans, where a 5 percent deposit purchase mortgage is up 3.45 percent in one year, and a five-year just 2.90 percent. hundred.

What to do if you need a mortgage

Borrowers who need to find a mortgage because their current fixed-rate agreement is coming to an end, or because they have agreed to purchase a home, have been urged to act but not panic..

Banks and building societies continue to lend and mortgages are still being offered and applications accepted.

However, rates are changing rapidly and there is no guarantee that the deals will last and not be replaced by mortgages that charge higher rates.

This is the best Money Mortgage Rate Calculator powered by L&C that can show you offers that match the value of your mortgage and property

What if I need to re-mortgage?

Borrowers should shop around and talk to a mortgage broker and be prepared to act to secure a rate.

Anyone with a fixed-rate agreement ending within the next six to nine months should consider how much it would cost to remortgage now and consider closing a new agreement.

Most mortgage deals allow fees to be added to the loan and are then only charged when you withdraw. By doing this, borrowers can lock in a rate without paying expensive setup fees.

What if I am buying a house?

Those with agreed home purchases should also aim to lock in rates as soon as possible, so they know exactly what their monthly payments will be.

Homebuyers should be careful not to overstretch themselves and be prepared for the possibility of house prices falling from their current high levels, due to higher mortgage rates limiting people’s borrowing capacity.

How to Compare Mortgage Costs

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

You can use our best mortgage rate calculator to display offers that match your home value, mortgage size, term, and fixed rate needs.

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

> Consult the best fixed-rate mortgages that you could apply for

Some links in this article may be affiliate links. If you click on them, we may earn a small commission. That helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.