Interest rate raised to 1% by Bank of England

Posted in May 2022

The recent interest rate increase to 1%, is still comparatively low when you look back at previous years

Interest rate raised to 1% by Bank of England

On Thursday 5th May 2022, the Bank of England announced a 0.25% increase in its base rate from 0.75% to 1.00%

However, despite the recent quarter percent increase, the current 1% rate is still very low compared to previous years. For example, back in October 1989, the interest rate was an eye-watering 14.88%!

Alongside the 1% interest rate, there continues to be some excellent mortgage deals still available.

A recent report by the Home Owners Alliance lists some of the best mortgage deals currently on offer in May:- 

Best 2-Year Fixed Rate Mortgage

The lowest rate this month on a 2-year fixed rate deal is with Barclays at 2.19%. You’ll need a 45% deposit, and it has an arrangement fee of £749. But it’s only available for purchases. If you are re-mortgaging, the lowest rate available on a 2-year fixed rate deal is from Yorkshire Building Society at 2.20%. You will need a 25% deposit and it has an arrangement fee of £1,495. This is also available for purchases.

Best 3-Year Fixed Rate Mortgage

The best rate on a 3-year fixed rate deal this month is from Barclays at 2.25%. A deposit of 40% is needed plus it has an arrangement fee of £999. This deal is available for re-mortgages and purchases.

Best 5-Year Fixed Rate Mortgage

The lowest rate on a 5-year fixed rate deal this month is 2.24%, offered by two lenders. Nationwide offers a 5-year fixed rate deal at 2.24%.  For this you will need a 40% deposit plus it has an arrangement fee of £999 and it’s only available for purchases. 

NatWest also offers a 5-year fixed rate deal at 2.24%. It also requires a 40% deposit, has an arrangement fee of £995 and this rate is also only available for purchases. This deal is slightly lower than the best rate available on a 3-year fix.

The lowest rate on a 5-year fixed this month if you’re re-mortgaging, is from NatWest at 2.27%. You will need at least a 25% deposit and it has an arrangement fee of £995.

Best Variable Rate Mortgages

The lowest rate on a variable rate mortgage for May is from Skipton Building Society For Intermediaries at Base + 0.65% for 2 years. Following the latest rate rise, this means the initial rate currently stands at 1.65%. You will need a deposit of 40% plus an arrangement fee of £995.

Best Help-to-Buy Mortgage Rates

Nationwide is offering a 5-year fixed rate Help-to Buy-Mortgage at 2.34%. There’s a £999 product fee but you’ll also get £500 cashback. Plus it is available up to 75% loan-to-value (LTV).

Green Mortgage Rates

For those looking at a green mortgage, it’s worth taking a look at Virgin Money’s 2 year Greener New Build Fixed Cashback Everyday Mortgage at 2.18%. This deal is only available on new builds and the property must have or be predicted to have an EPC rating of A or B. You will also require a 35% deposit, plus it has a £995 product fee, although also offers £300 cashback.

Where possible, it would be a good idea to move swiftly as some of the lower rate mortgage deals might not be available for long!

If you’re interested in buying a property in the North London area, please register with us on our website. If you would like to book a viewing, or discuss your requirements, please call our Sales Managers today on 020-7619-3750 (Archway), 020-7354-9111 (Highbury) or 020-7281-2000 (Finsbury Park/Stroud Green), or email . We look forward to hearing from you. 

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