Only a few weeks ago, the money markets were pricing a quarter point base rate rise in May at 90%, but weak economic data and falling inflation have now dampened expectations of an imminent rise. According to ONS figures (Office for National Statistics), UK growth fell, unexpectedly, to its slowest rate in five years (0.1%). At the same time, inflation dropped from 2.7% to 2.5% - a 12 month low. It means many are now predicting the base rate may not be raised until August, or even 2019.

Mortgage rates had been rising in expectation of an increase - over the last six months average two year fixed rates climbed from 2.21% to 2.48% and five year rates from 2.76% to 2.91%. Now, with a subdued housing market and falling lending levels, we may well see increasing competition for new business. This is already evident in the buy to let sector, where the number of mortgage products broke the 2,000 mark for the first time and a number of lenders recently removed age limits in an effort to attract silver landlords.

 

Below is a selection of this month’s best buys from Moneyfacts.co.uk:

 

Two year fixed rates: 1.41% from Yorkshire BS. Completion £495. 65% LTV. 
1.46% from Yorkshire BS. Completion £495. 75% LTV. 

Three year fixed rates: 1.66% from Yorkshire BS. Completion £495. 65% LTV.. 
1.83% from Tesco Bank. Fees none. 75% LTV. 

Five year fixed rates: 1.99% from Metro Bank. Booking £999. 80% LTV.
2.09% from HSBC. Booking £999. 85% LTV.

Tracker rates: 1.74% (1.24% + base rate). For term. From Coventry BS. Arrangement £999. 65% LTV 
1.80% (1.30% + base rate). For term. From Coventry BS. Arrangement £999. 75% LTV. 

 

BUY-TO-LET (BTL)

Best two year fixed rate: 1.62% from Post Office Money. Arrangement £995. 60% LTV. 

Five year fixed rate: 2.73% from Post Office Money. Arrangement £995. 75% LTV.

Best two year tracker rate: 2.19% (1.69% + base rate) from HSBC. Booking £1999. 75% LTV. 

 

The information we provide is our personal opinion and should not be relied upon for financial advice. Should you need financial advice or guidance please contact an appropriate professional.