Current interest and mortgage rates , and how these are impacting the housing market? 📊
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What’s happening with mortgage rates now?
There has been lots of news about Base Rate rises and how they can impact mortgage rates. The Bank of England (BoE) meet about every six weeks to decide whether the Base Rate should go up or down, or stay the same.
On 3 August, the Base Rate increased to 5.25%, from 5% in June...
Rightmove's mortgage expert, Matt Smith, says: “The positive direction for rates continues this week albeit a little more slowly, with five-year rates edging down slightly more than two-year equivalent products. Swap rates are broadly flat week-on-week in response to a range of economic indicators published last week, but we should get more sense of any impact in the coming days.
“We are likely to see a continued period of stability for home-movers at least for now, and while the market remains sensitive to any surprises, it appears that lenders will continue to price competitively where they can,” he adds.
The current average mortgage rate for a five-year fixed, 85% loan-to-value mortgage is 5.82%, down from 5.92% last week. The lowest rate for this type of mortgage is 5.37%.
Average monthly mortgage repayments by average house price
The average monthly mortgage payment on a first-time buyer type property which is currently £223,614, for someone taking out an average five-year fixed, 85% LTV mortgage, is now £1,204 per month if repaying over 25 years, down by £22 per month compared to last week.
Source: Rightmove House Price Index and Podium data
How much can you borrow with a mortgage?
The amount you can borrow with a mortgage is determined by an affordability assessment and your interest rate is determined by the amount of deposit you have, otherwise known as loan-to-value (LTV).
LTV is expressed as a percentage, and it reflects the size of the mortgage you need as a proportion of the value of the home you want to buy. The bigger the deposit you have, the lower the LTV, and vice-versa.
A good way to find out how much you could borrow is to use a mortgage calculator. And to get a personalised result by applying for a Mortgage in Principle which will take you one step closer to a mortgage offer.
Read more about the different types of mortgages and how to choose a mortgage term that meets your needs, both now and in the future.
If you would like more advice on mortgages, we will ask our Mortgage Specalists to make contact with you - to schedule a call, please email Emma Travers emma.travers@cavendishproperty.co.uk (pictured below).
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