Best mortgage rates UK

If you’ve been thinking about switching to a better mortgage deal before interest rates rise you’d better move quickly.

The lowest five-year fixed-rate mortgage deals have already gone, according to research from Moneyfacts.

Meanwhile, Barclays, Santander and Yorkshire Building Society have all pulled cheap deals.

Brits with a 40% deposit snapped up a 1.99% rate if they switched in May, the research found. But since then, rates have crept upwards, to 2.29% today.

Lowest 5-year fix with a 40% deposit

For borrowers with smaller deposits, the best time to grab a deal was in July and August. But in all cases, the rates have climbed up in September.

Lowest 5-year fix with a 25% deposit

She said: “While competition in the mortgage market remains high, it’s clear that record low rates are starting to disappear.”

Just a small rise of just 0.25% on today’s average standard variable rate of 4.84% would cost borrowers an extra £261.72 a year, according to Moneyfacts.

The research comes as Christopher Woolard, from the Financial Conduct Authority, highlighted the impact of an interest rate rise on Brits’ high levels of debt.

He said: “At least 1.85 million UK homeowners have never experienced an interest rate rise.”

3 ways to prepare for an interest rate rise

Rex

The Bank of England has kept the official interest rate low at 0.5% for years, and chances are it could start rising slowly in the next year.

Don’t panic - any increase is likely to be small. But you can prepare.

1. Lock into a good rate

If you are worried about rising interest rates, you can take out a fixed-rate mortgage for three, five or ten years. We’ve got the lowest rates here, the lowest rates with a 10% deposit here and the lowest with a 5% deposit here. Remember to factor in fees. If in doubt contact a mortgage broker - you can find one on Unbiased here.

3. Make money from your home

If you think you might struggle, consider taking in a lodger, listing your spare room on Airbnb or even renting out your driveway. And there’s more ideas to make money from your home here. Don't forget to check the terms and conditions of your mortgage beforehand.