But this level of inflation is still higher than the bank's inflation target of 2%. The Bank of England is predicting that inflation rates will continue to fall to 5% and expect to reach the 2% target by early 2025.
On 3rd August 2023, we saw the 14th rise to the Bank of England base rate which increased from 5% to 5.25%. In the last five reviews, with the latest being on 21st March 2024, the Bank of England has decided to keep the base rate unchanged at 5.25%. The next interest rate review is on 9th May 2024.
Some financial experts are warning borrowers to be careful because there are no guarantees that rates will fall, with some believing that rates are already as low as they will get. With all this in mind for those clients who need to refinance current mortgages or are about to embark upon a property purchase now is a good time to be talking to independent qualified adviser as they will have the latest rates at their fingertips.
What mortgage rates are available now?
On 26th March 2024, the fixed rate and variable rate re-mortgages based on a 75% Loan-To-Value ratio in the UK were as follows:
| 75% Loan-to-Value | 2-year term | 5-year term |
| Fixed | 4.73% | 3.37% |
Other rates are available to people with a lower Loan-to-Value ratio. Deposits or equity of 40%, will give borrowers access to a 60% Loan-To-Value deals.
| 60% Loan-to-Value | 2-year term | 5-year term |
| Fixed | 3.56% | 3.37% |
Please note that rates can change at short notice and varying fees will apply. Fees can affect the total cost of the product over the selected term of the deal.
What influences the mortgage rates that are available to you?
It is important to understand the Loan-To-Value (LTV) ratio and the impact this has on the rates you can access. Loan-To-Value is a measure comparing the amount you are borrowing through a mortgage to the value of the property. The higher your deposit, the lower your Loan-To-Value ratio is, which normally means access to more favourable mortgage rates.
Another factor that impacts available rates is the term of the loan, typically the longer the term of the fixed-rate product, the lower the interest rate. *However, this is highly dependent on individual lenders and their economic projections including the direction of interest rates.
Why have mortgage rates gone up?
The base rate is set by the Bank of England and is the interest rate charged by the Bank of England to other banks when they borrow money. The base rate directly influences the rates charged for mortgages as if the base rate goes up banks and lenders are being charged more to borrow money, they will therefore pass this cost on and charge borrowers more interest. The Bank of England has increased the base rate on fourteen occasions since 20th December 2021 in order to control inflation.
Source: https://www.bankofengland.co.uk/monetary-policy/the-interest-rate-bank-rate
What can I do to secure a better mortgage rate?
You can secure a rate up to six months before your current mortgage deal is due to come to an end. That way, if rates go up you have secured a deal, if rates go down in that time TaxAssist's Mortgage Partner can move you onto the better rate – thus ‘hedging’ your bets.
TaxAssist's mortgage partner is a fully independent broker, with access to the whole of market, allowing their advisers to select products from a comprehensive and established panel of lenders, including those not available through high street banks or providers. This ensures that our clients always receive tailored solutions at highly competitive mortgage rates.
TaxAssist's mortgage partner will remove the hassle and headache of applying for a mortgage and is always by your side from your initial enquiry, all the way through to the completion of your mortgage.
Speak with TaxAssist Accountants today on 0800 0523 555 to book a free consultation to understand the rates that are available to you today.