Mortgage rates rise in February 2022
The latest data from the Bank of England revealed that overall average mortgage rates for new business increased in February 2022.
What they said
The average floating mortgage rate for new business 1.69%
The average fixed mortgage rate for new business 1.59%
The average overall mortgage rate for new business 1.60%
Following the recent increases in Bank Rate as illustrated in the graph below it is no surprise that mortgage rates are starting to increase. The Bank of England's Bank Rate sets the tone for all other mortgage and interest rates.
However, whilst rising mortgage rates on top of rising living costs is not likely to be welcomed, it is worth putting the latest figures in context.
Average mortgage rates on floating rate mortgages are 12% lower than they were one year ago and average fixed-rate mortgage rates are 17% lower than they were in February 2021.
We still live in an environment of extremely low mortgage rates and these latest changes will not have a big impact on household budgets.
If we consider a £100,000 mortgage the change in monthly mortgage payments indicated by the latest rates is:
£4.20 per month on a floating rate mortgage
£0.50 per month (50p) on a new fixed-rate mortgage
Hopefully, these increases will not break the bank.