Brand Logo Moneyfacts Group plc
Telephone Icon T: 01603 476476 Email Icon E: enquiries@moneyfacts.co.uk LinkedIn Icon

Moneyfacts reacts to the BOE interest rate rise

Image of Moneyfacts.co.uk Brand Logo Image of Moneyfacts.co.uk Brand Logo Image of Moneyfacts.co.uk Brand Logo
Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert 01603 476210 Email Rachel
22/06/2023

Moneyfacts reacts to the BOE interest rate rise

The Bank of England has today increased base rate by 0.50%, up from 4.50% to 5.00%. Moneyfactscompare.co.uk has analysed the average rates offered across savings and mortgages and considers what this decision may mean for consumers moving forward.

Moneyfacts reacts to the BOE interest rate rise

The Bank of England has today increased base rate by 0.50%, up from 4.50% to 5.00%. Moneyfactscompare.co.uk has analysed the average rates offered across savings and mortgages and considers what this decision may mean for consumers moving forward.

Mortgage market analysis

Average mortgage rates

Jun-18

Jun-21

Dec-21

Jun-22

May-23

Jun-23

Standard variable rate (SVR)

4.74%

4.41%

4.40%

4.91%

7.37%

7.52%

Two-year fixed mortgage

2.52%

2.59%

2.34%

3.25%

5.26%

5.49%

Five-year fixed mortgage

2.92%

2.82%

2.64%

3.37%

4.97%

5.17%

10-year fixed mortgage

3.16%

2.98%

2.97%

3.36%

5.00%

5.25%

Average rates shown are as at the first available day of the month, unless stated otherwise. Source: Moneyfactscompare.co.uk

 

Mortgage market analysis

Average mortgage rates

Jun-18

Jun-21

Dec-21

Jun-22

May-23

Jun-23

Standard variable rate (SVR)

4.74%

4.41%

4.40%

4.91%

7.37%

7.52%

Two-year fixed mortgage

2.52%

2.59%

2.34%

3.25%

5.26%

5.49%

Five-year fixed mortgage

2.92%

2.82%

2.64%

3.37%

4.97%

5.17%

10-year fixed mortgage

3.16%

2.98%

2.97%

3.36%

5.00%

5.25%

Average rates shown are as at the first available day of the month, unless stated otherwise. Source: Moneyfactscompare.co.uk

 

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“Borrowers may be deeply concerned to see another base rate rise, particularly if they are sitting on a Standard Variable Rate (SVR) or are about to come off a low fixed rate. Amid a cost-of-living crisis, rising interest rates can have a devastating impact on borrowers who are already struggling to cover their monthly essentials and could well lead to a rise of ‘mortgage prisoners’. Those borrowers who are still on a competitive fixed rate deal for a few more years may want to consider overpaying their mortgage to reduce the size of their loan. However, those aiming to refinance on a fixed mortgage right now will find rates are around 3% more than they were a year ago. Despite rising fixed rates, it’s still worth considering a switch from a Standard Variable Rate for more peace of mind to guarantee the monthly mortgage payments, as the average SVR has risen to its highest point in over 15 years. A rate rise of 0.50% on the current average SVR of 7.52% would add approximately £1,576* onto total repayments over two years.

“Affordability remains a key concern for any borrower, some first-time buyers may put their plans to jump onto the property ladder on hold in hopes the housing supply shortage will improve and interest rate volatility calms. It is imperative new buyers can comfortably build a large enough deposit and meet their mortgage repayments, which may be challenging to meet if they have limited disposable income. Consumers looking to remortgage may find it difficult to afford higher interest rates, so seeking independent advice is essential to consider every option available to them, such as downsizing.”

*Average standard variable rate (SVR) is currently 7.52%. Calculations based on a £200,000 mortgage over a 25-year term on a repayment basis.

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“Borrowers may be deeply concerned to see another base rate rise, particularly if they are sitting on a Standard Variable Rate (SVR) or are about to come off a low fixed rate. Amid a cost-of-living crisis, rising interest rates can have a devastating impact on borrowers who are already struggling to cover their monthly essentials and could well lead to a rise of ‘mortgage prisoners’. Those borrowers who are still on a competitive fixed rate deal for a few more years may want to consider overpaying their mortgage to reduce the size of their loan. However, those aiming to refinance on a fixed mortgage right now will find rates are around 3% more than they were a year ago. Despite rising fixed rates, it’s still worth considering a switch from a Standard Variable Rate for more peace of mind to guarantee the monthly mortgage payments, as the average SVR has risen to its highest point in over 15 years. A rate rise of 0.50% on the current average SVR of 7.52% would add approximately £1,576* onto total repayments over two years.

“Affordability remains a key concern for any borrower, some first-time buyers may put their plans to jump onto the property ladder on hold in hopes the housing supply shortage will improve and interest rate volatility calms. It is imperative new buyers can comfortably build a large enough deposit and meet their mortgage repayments, which may be challenging to meet if they have limited disposable income. Consumers looking to remortgage may find it difficult to afford higher interest rates, so seeking independent advice is essential to consider every option available to them, such as downsizing.”

*Average standard variable rate (SVR) is currently 7.52%. Calculations based on a £200,000 mortgage over a 25-year term on a repayment basis.

Savings market analysis

Average savings rates

Jun-18

Jun-21

Dec-21

Jun-22

May-23

Jun-23

Easy access

0.50%

0.16%

0.20%

0.46%

2.06%

2.21%

Notice account

0.84%

0.40%

0.54%

0.92%

2.95%

3.18%

Easy access ISA

0.81%

0.22%

0.26%

0.52%

2.26%

2.35%

Notice ISA

0.97%

0.33%

0.37%

0.77%

2.93%

3.08%

Averages based on £10,000 gross rate. Average rates shown are as at the first available day of the month, unless stated otherwise. Source: Moneyfactscompare.co.uk

 

Savings market analysis

Average savings rates

Jun-18

Jun-21

Dec-21

Jun-22

May-23

Jun-23

Easy access

0.50%

0.16%

0.20%

0.46%

2.06%

2.21%

Notice account

0.84%

0.40%

0.54%

0.92%

2.95%

3.18%

Easy access ISA

0.81%

0.22%

0.26%

0.52%

2.26%

2.35%

Notice ISA

0.97%

0.33%

0.37%

0.77%

2.93%

3.08%

Averages based on £10,000 gross rate. Average rates shown are as at the first available day of the month, unless stated otherwise. Source: Moneyfactscompare.co.uk

 

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“A flurry of savings rate competition and consecutive Bank of England base rate rises continue to improve the savings market. Those savers earning variable rates of interest who take time to review their existing pots may find more attractive returns are available elsewhere, as their loyalty has not been rewarded. The top easy access accounts pay around 4%, with the market average around 2%, however, some of the biggest banks pay much less. Shopping around for a better deal is imperative in a volatile interest rate environment, so keeping an eye on the top rate tables and signing up to newsletters is wise. Challenger banks and building societies continue to offer some of the top returns and have the same deposit protections in place as the more familiar high street banks, so there is little reason to overlook them in favour of a well-known brand.

“Those savers making plans for their investment must choose the right account that suits their short or longer-term goals. Easy access accounts may be more appropriate for someone who may need the funds quickly, whereas notice accounts can be ideal for those planning to use their nest egg in a few months’ time, and they can also utilise their ISA allowance by using those that sit in the tax-free wrapper. Consumers with longer-term needs for their savings deposit could fix into a bond and pick a deal that pays monthly interest if they wish to supplement their income. Rising interest rates may also impact those with large pots, as they may breach their Personal Savings Allowance, so seeking advice and keeping on top of the latest deals to surface is essential.”

Due to the current volatility of interest rates, please see below for today’s average rates in support: Two-year fixed mortgage: 6.19%, Five-year fixed mortgage: 5.82%, 10-year fixed mortgage: 5.56%. Easy access: 2.35%, Notice account: 3.38%, Easy access ISA: 2.47%, Notice ISA: 3.24%.

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“A flurry of savings rate competition and consecutive Bank of England base rate rises continue to improve the savings market. Those savers earning variable rates of interest who take time to review their existing pots may find more attractive returns are available elsewhere, as their loyalty has not been rewarded. The top easy access accounts pay around 4%, with the market average around 2%, however, some of the biggest banks pay much less. Shopping around for a better deal is imperative in a volatile interest rate environment, so keeping an eye on the top rate tables and signing up to newsletters is wise. Challenger banks and building societies continue to offer some of the top returns and have the same deposit protections in place as the more familiar high street banks, so there is little reason to overlook them in favour of a well-known brand.

“Those savers making plans for their investment must choose the right account that suits their short or longer-term goals. Easy access accounts may be more appropriate for someone who may need the funds quickly, whereas notice accounts can be ideal for those planning to use their nest egg in a few months’ time, and they can also utilise their ISA allowance by using those that sit in the tax-free wrapper. Consumers with longer-term needs for their savings deposit could fix into a bond and pick a deal that pays monthly interest if they wish to supplement their income. Rising interest rates may also impact those with large pots, as they may breach their Personal Savings Allowance, so seeking advice and keeping on top of the latest deals to surface is essential.”

Due to the current volatility of interest rates, please see below for today’s average rates in support: Two-year fixed mortgage: 6.19%, Five-year fixed mortgage: 5.82%, 10-year fixed mortgage: 5.56%. Easy access: 2.35%, Notice account: 3.38%, Easy access ISA: 2.47%, Notice ISA: 3.24%.

Notes to editors

Pioneering financial comparison technology for over 35 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfactscompare.co.uk if you decide to source this information.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

Notes to editors

Pioneering financial comparison technology for over 35 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfactscompare.co.uk if you decide to source this information.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

Contact Us If you're looking for extra comment, a chart or more information, then please give us a call. We are always more than happy to help.
Rachel Springall Press Officer / Finance Expert
Caitlyn Eastell Apprentice Press & PR Assistant