Mortgage rates on the up in March
The latest data from the Bank of England revealed that overall average mortgage rates for new business increased again in March 2023, but the rate of increase slowed significantly.
What the Bank of England said
The average floating mortgage rate for new business was 4.82%
The average fixed mortgage rate for new business was 4.32%
The average overall mortgage rate for new business was 4.44%
As expected the average mortgage rates for new business continued to increase in March reflecting the link between the Bank of England's Bank Rate, swap rates and mortgage rates.
The average new business rate for floating rate mortgages increased by 9.30% from 4.42% in February to 4.82% in March, up significantly from their level of 1.89% in March last year.
The increase in average fixed-rate mortgages was much smaller at 2.9%, from 4.20% to 4.32%, however year on year the increase is similar. In March 2022 the average fixed rate mortgage for new business was just 1.73%. A year is a long time in mortgage rates...
The increase in mortgage rates has further stretched housing affordability. The average mortgage payment on a 80% LTV 25 year capital repayment mortgage based on current house prices is now £1,261, up from £1,229 last month and £930 one year ago.
We expect the increase in mortgage rates to continue as the Bank of England raises Bank Rate to control inflation.
To see how much you will pay on your next mortgage you can use our mortgage payments calculator below: