Bank of England 0.5% Interest Rate Rise 2nd February 2023 – Today 2nd February 2023 has seen another interest rate increase of 0.50% taking Bank Of England Base Rate to currently 4% – it’s first increase of 2023 and 10th consecutive increase in a row. Unfortunately, this does have an effect on mortgages depending on the type you currently have.
Despite this though a mortgage price war has taken taken hold bringing fixed rates plummeting down since they peaked in November 2022. The average residential 2-year rates have fallen from a peak of around 5.90% in November to around 4.67% today, whilst 5-year rates have dipped even further, to around 4.32% from around 5.67%. The fixed rate improvements mean that rates are now at the lowest level since the mini-Budget sent them into orbit.
That said, rates remain higher than the lows of recent years and those coming toward the end of a fixed deal will need to plan ahead with their remortgage. At the same time lender Standard Variable Rates (SVR) continue to climb with the average of the top ten lender reversionary rates now standing at 6.73%.
UK interest rates were cut to 0.5% in 2009 after the financial crisis, then a record low, but were then lowered to 0.25% after the Brexit referendum in 2016. They then hit 0.1% in March 2020 once the pandemic hit, before the Bank began hiking in December 2021. But the days of ultra-low interest rates are behind us, people shouldn’t expect rates to return to the very low levels that we saw before the pandemic, even if the BoE do start to cut rates next year.
It is therefore very important to know the exact expiry date of your current fixed deal and to speak to a whole of market mortgage adviser like Be Mortgages at least 6-9 months prior to that expiry date to avoid automatically reverting to your current lenders much higher Standard Variable Rate. Alternatively if you are looking to purchase a property it is also imperative you get in touch with a mortgage broker very early on so that you know how much you can borrow, what interest rates are available and budget for how much your monthly mortgage payments will be.
Be Mortgages have access to every mortgage lender and will find you the cheapest rate available and advise on ways we can look to reduce your monthly mortgage payments. Once we have reserved you a rate we will continuously monitor the market for you and if rates go down even further we will apply for the new lower rate for you. Get in touch 0203 2913001.
Your home may be repossessed if you do not keep up the repayments on your mortgage.