Best mortgage rates – May 2022

With mortgage rates continuing to rise it’s more important than ever to check you're on the best mortgage deal. Read on for the best rates, including fees, best remortgaging deals, best Help to Buy mortgage deals, green mortgage deals and more this month.

Finding the best mortgage rates in a sea of mortgage deals is hard work. So every month we’ll be showcasing the best deals for you, with input from the mortgage experts at L&C.

Best mortgage rates May 2022

The Bank of England has raised the base rate of interest from 0.75% to 1%, the highest level since 2009. And it’s the fourth consecutive increase since December.

Experts widely predicted the Bank would increase interest rates to tackle surging inflation although there was speculation over how much they would rise by. While interest rates have now risen to 1%, three of the nine members of the Bank of England Monetary Policy Committee voted for a sharper increase to 1.25%.

And the Bank of England warned inflation will top 10% by the end of the year, the highest rate since 1982. It also said the UK risks sliding into recession due to higher energy prices.

It’s vital that you know what this week’s increase in the base rate of interest will mean for your mortgage. Are you on a tracker mortgage? Then the increase means your monthly mortgage payments will increase too. And if you’re on a Standard Variable Rate your payments may increase as well. However your lender will decide how much, if any, of the increase they will pass on. And if it wanted to your lender could increase rates by more. So keep an eye out for alerts from your lender.

Now might be the best time to remortgage onto a fixed rate to protect yourself against any future rises. So read more about How to protect yourself from a mortgage rate rise in our guide.

If you’re on a fixed rate mortgage you will only see a change in your repayments when your fixed term ends.

However it isn’t all bad news because while rates are continuing to rise there are still some good deals available. But it’s a good idea to move quickly as these could disappear.

And there is one benefit of higher interest rates when it comes to mortgages because over time it will erode the amount you have borrowed from your lender. However bearing the brunt of high inflation is going to take a heavy toll on many households and could well outweigh this.

Best 2 year fixed rate mortgage

Unsurprisingly rates are up again this month if you’re looking for a 2 year fix. The lowest rate this month on a 2 year fix is with Barclays at 2.19%. You’ll need a 45% deposit and it has an arrangement fee of £749. But it’s only available for purchases. If you’re remortgaging the lowest rate on a 2 year fix is from Yorkshire Building Society at 2.20%. You’ll need a 25% deposit and it has an arrangement fee of £1,495. It’s available for purchases too.

Last month the lowest rate on a 2 year fix was from Lloyds Bank at 1.85%. You needed a deposit of 40% however it was only available for remortgages. And if you were buying a house, Barclays offered the lowest rate on a 2 year fix at 1.89%. You needed a 45% deposit and it had an arrangement fee of £749.

Best 3 year fixed rate mortgage

And it’s a similar story with 3 year fixes. The best rate on a 3 year fix this month is from Barclays at 2.25%.You’ll need a deposit of 40% and it has an arrangement fee of £999. And it’s available for remortgages and purchases.

Last month Metro Bank offered the best rate on a 3 year fix at 2.09%. You needed a 25% deposit and it had an arrangement fee of £999. And it was available for remortgages and purchases.

Best 5 year fixed rate mortgage

The lowest rate on a 5 year fix this month is 2.24%, offered by two lenders. Nationwide offers a 5 year fix at 2.24%; you’ll need a 40% deposit, it has an arrangement fee of £999 and it’s only available for purchases. NatWest also offers a 5 year fix at 2.24%. It also requires a 40% deposit, has an arrangement fee of £995 and this rate is also only available for purchases. Interestingly this is slightly lower than the best rate available on a 3 year fix.

The lowest rate on a 5 year fix this month if you’re remortgaging is from NatWest at 2.27%. You’ll need at least a 25% deposit and it has an arrangement fee of £995.

This is a significant rise compared to the lowest rate on a 5 year fix last month if you were remortgaging which was with Lloyds at 1.86%.You needed a deposit of 40% and it had an arrangement fee of £999.

While last month the lowest rate on a 5 year fix was 2.04% if you were buying a house. Two lenders offered this rate: NatWest, where you needed at least a 25% deposit, it had an arrangement fee of £995. Santander also offered this rate; you needed a 40% deposit and it had an arrangement fee of £999.

Best variable rate mortgages

The lowest rate on a variable rate mortgage this month is from Skipton Building Society For Intermediaries at Base + 0.65% for 2 years. Following this latest rate rise this means the initial rate currently stands at 1.65%. You’ll need a deposit of 40% and it also has an arrangement fee of £995.

Best Help to Buy mortgage rates

If you’re looking for a Help to Buy Mortgage Nationwide offers the 5 year Fixed Rate Help to Buy Mortgage at 2.34%. There’s a £999 product fee but you’ll get £500 cashback. And it’s available up to 75% LTV.

Green mortgage rates

And if you’re looking for a green mortgage check out Virgin Money’s 2 year Greener New Build Fixed Cashback Everyday Mortgage at 2.18%. It’s only available on new builds and the property must have or be predicted to have an EPC rating of A or B. You’ll need a 35% deposit and it has a £995 product fee but also offers £300 cashback.

Get fee-free mortgage advice from our partners at L&C. Start online or give them a call today about your mortgage needs

Browse mortgage rates

Take a look at today’s best rates from lenders and get an overview of mortgage options now.

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See all best rate mortgage deals

Your home or property may be repossessed if you do not keep up the repayments on your mortgage.

Representative example A mortgage of £204,302 payable over 23 years, initially on a fixed rate until 31/12/24 at 1.56% and then on a variable rate of 5.05% for the remaining 18 years would require 62 payments of £881.42 and 214 payments of £1,168.08. The total amount payable would be £305,690 made up of the loan amount plus interest (£100,315) and fees (£1,073). The overall cost for comparison is 3.6% APRC representative.

Is now a good time to remortgage?

While we have seen some of the cheapest mortgage deals disappear from the market over the last few months, there are still some good rates available. But if you want to remortgage, you should act quickly to grab deals before they disappear.

Due to the current high demand, it is taking longer to remortgage than in previous years.

If you’re on a SVR, locking into to a fixed rate not only means you will have certainty over how much you’ll be paying on your mortgage each month but you may also find your repayments drop too.

If you’re locked into a deal, you may still be able to save by remortgaging onto a better deal. But you should check if you need to pay any fees like an early repayment charge. It’s a good idea to speak to a broker who can talk you through your options. They’ll also crunch the numbers for you – you may find that even after you pay any fees you’re still going to be better off by remortgaging.

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What are mortgage rates?

Mortgage rates are the rate of interest charged by a mortgage lender (bank or building society). The interest is charged by the lender as compensation for the money they have lent them in order to purchase a property.

Interest rates are determined by the lender in most cases, and can be either fixed (ie remain the same for the term of the mortgage) or variable (where they fluctuate with a benchmark interest rate). Before you compare mortgages, you need to understand the different types. For more information see what type of mortgage should I get?

Help finding the best mortgage deal

The best mortgage deal isn’t just about interest rates. You need to consider whether the mortgage term is right for you, arrangement fees and more.

To get a better idea of the best mortgage for you, use our online mortgage service provided by the fee-free mortgage broker L&C.

L&C can compare the latest mortgage deals for you over the phone, or you can do it yourself in real-time online. Whichever you choose they can help search the market to find you the best mortgage deal, see if you qualify and even help you apply online, doing all the legwork to get you your mortgage offer.

Handy tools and calculators

Here’s a selection of practical gadgets and tools to help keep things simple.