Best Mortgage Rates - February 2023 - HomeOwners Alliance (2023)

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 February 2023

The Bank of England may have made its tenth consecutive hike in the base rate, taking it from 3.5% to 4% on Thursday 2 February, the highest level since Autumn 2008. But the best rates on fixed rate mortgages fell again this month as a mortgage price war takes hold.

Fee-free broker reveals that the average of the best low LTV 2 and 5 year remortgage rates from the top ten lenders has dropped from a peak of 5.90% in November 2022 to 4.67%. While 5 year rates have dropped even further, from 5.67% in November 2022 to 4.32%. The difference in rates mean borrowers could save over £100 per month on a typical £150,000 repayment mortgage over 25 years.

David Hollingworth, Associate Director at L&C Mortgages, says: “The rollercoaster ride for mortgage borrowers continues and many may have lost track of how much fixed rates have improved since the pandemonium following the mini Budget. Funding conditions have improved and as lenders compete harder for mortgage business a price war has broken out, sending fixed rate costs plummeting. As a result, the cost of the current best in class fixed deals is potentially thousands per annum lower than just a few months ago.

“That said, rates remain higher than the lows of recent years and those coming toward the end of a fixed deal will need to plan ahead.”

But it’s a very different picture for homeowners on their lender’s standard variable rate. The L&C analysis shows SVR rates are soaring, with the average of the top ten lender’s SVR standing at 6.73%, up from 5.63% in November 2022.

So if you’re on your lender’s SVR you should urgently review your options. If you’re holding off because you want to fix your mortgage but want to wait and see what happens to rates first, you may consider taking out a penalty-free tracker as a holding position rather than staying on the SVR. It’s a good idea to chat through your options with a fee-free mortgage broker.

How to check if you’re on the best mortgage rate

The easiest way to do this is to use L&C’s Rate Check service. But it’s not only useful for people who want to check their current mortgage; if you’ve applied, been given a decision in principle or a mortgage offer from a major UK bank or building society since October 2022, you may be able to find a better rate today. So don’t delay.

Plus, L&C are fee-free, unlike many brokers which charge fees that can amount to thousands of pounds. So you may save even more.

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When you’re considering your remortgage options, while the rate is obviously a key factor, we’re seeing high arrangement fees on many of the best rates so look at the whole picture. But don’t worry,a fee-free mortgage broker will do the calculations for you.

How do increases to the base rate affect my mortgage?

Looking at the increase in the base rate in more detail, how does it impact your current mortgage? The amount a rise in the base rate of interest will cost you will depend on whattype of mortgageyou have.

If you’re on atracker mortgage, an increase to the base rate means your monthly mortgage payments will increase as well.

While if you’re on aStandard Variable Rateyour payments may increase as well. But your lender decides how much, if any, of the increase they would pass on. And if it wanted to your lender could increase rates by more.

If you’re on afixed rate mortgageyou will only see a change in your repayments when your fixed term ends. However, the rate you get when your current deal ends may be more expensive than you’re paying now so it’s more important than ever to shop around. Read our guide Should I remortgage now?

Best mortgage rates February 2023

As the rates war continues we’ve seen rates drop across the board, so it’s vital to check your current mortgage. Or if you’ve already started the remortgage process, make sure you get the best mortgage for you. Again, the easiest way to do this is to use L&C’s Rate Check service or by speaking directly to a fee-free broker who has the expertise to search the market for you. You can access both from ourremortgage page.

Best 2 year fixedratemortgage

The best mortgage rates on a 2 year fix this month is from Bank of Ireland at 4.49%. You’ll need a 40% deposit and it has an arrangement fee of £1,495. This is a down from the lowest rate on a 2 year fix last month was from First Direct and Leeds Building Society at 4.74%.

Best 3 year fixedratemortgage

While if you’re looking for a 3 year fix, the best mortgage rates on a 3 year fix this month is from MPowered Mortgages at 4.54%. You’ll need a 40% deposit and it has a £999 arrangement fee, although you’ll get £500 cashback for remortgages. The best rate on a 3 year fix last month was also from MPowered Mortgages, at 4.74%.

Best 5 year fixedratemortgage

It’s a similar story with 5 years fixes. has launched a new exclusive 5 year fixed rate with the lowest rate on the market at 4.15%. You’ll need a 35% deposit and it has an arrangement fee of £1395 – although it offers a fee-free rate of 4.35%. The best rate available last month was from First Direct and Leeds Building Society at 4.39%.

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Best10 year fixed ratemortgage

While the best rate on a 10 year fix this month is from Virgin Money at 3.99%. You’ll need a 25% deposit and it has an arrangement fee of £995. But if you’re remortgaging you’ll get £1000 cashback, although you will need to pay a £214 valuation fee.

The best rate on a 10 year fix last month was from Halifax at 4.04% for remortgages and 4.5% for purchases.

Best variableratemortgages

If you’re looking for a variable rate mortgage, the best rate on a variable rate mortgage this month is from Hanley Economic Building Society’s 3.85% discount for term which has an initial rate of 3.14%. Although this initial rate may change following the increase to interest rates on 2 February 2023. You’ll need a 40% deposit and it has an arrangement fee of £1,000.

The lowest rate on a variable rate mortgage last month was from Newcastle Building Society’s 2 Year Discounted Variable Rate Mortgage which had an initial rate of 3.29%.

Best Buy to Let mortgages rates

Meanwhile the best rate on a fixed rate buy to let mortgage this month is the 2 year fix from The Mortgage Works at 3.99%. You’ll need a 35% deposit but it has a rather hefty arrangement fee of £3,750. The lowest rate on a fixed rate buy to let mortgage last month was also a 2 year fix from The Mortgage Works, at 4.29%.

Best Green Mortgage rates

If you’re looking for a green mortgage, Natwest offers a remortgage 5 year fixed rate at 4.19% to 60% LTV with a £995 fee, free valuation and £250 cashback. To get this rate you’ll need a valid Energy Performance Rating (EPC) of A or B.

Frequently Asked Questions

Are five year fixed rate mortgages a good idea?

Unless you’re likely to need to move within the next few years, a five-year deal can make good sense because you’ll have certainty over your payments for the next five years. But it could mean you miss out on better deals in the next few years. It’s a good idea to chat through your options with a fee-free mortgage broker

Fixed or variable mortgage – which is best?

If you’re looking at the best mortgage rates, choosing between a fixed and variable (or tracker) deal can be a tough decision. Variable and tracker mortgages may be cheaper than fixes right now but will leave you at the mercy of interest rate rises.If you’re considering a variable rate deal while you see what happens with fixed rate mortgages, look for one with no early repayment charge.By contrast, with fixed deals, you’ll know what your monthly repayments will be for the duration of the fixed rate period.

Is my fixed rate mortgage coming to an end?

To check when your current fixed rate mortgage finishes, you’ll need to read the Terms and Conditions or contact your lender. Say, for example, you took out a two year fix two years ago, your current deal could be due to end soon. Unless you want to go onto your lender’s standard variable rate, you will need toremortgageto a new deal. Some lenders will allow you to lock into a new offer between three and six months before your current deal ends. So make a note to start looking at the best mortgage rates available to you well in advance.

I’m selling: How do I find the best estate agent?

Choosing the right estate agent is vital. Make the right choice and you may sell faster, at a higher price and for a lower fee. To help you do this, we’ve designed the Best Estate Agent Finder tool. It allows you to compare fees, the average time to sell a property like yours, how often they achieve the asking price and how successful they are at selling similar homes. And you should probably take a look at the online agent route as well which includes firms like Purplebricks who say they can sell your house for less commission than the high street. Check out our online estate agent comparison table.

Who is offering the best mortgage rates in the UK?

The best mortgage rates available to you will depend on factors including whether you take out a fixed or variable rate mortgage, how long your deal will last and your LTV. But in February 2023 the best mortgage rates on a 2 year fix is from Bank of Ireland at 4.49%.

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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 toremortgagethan 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.

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.

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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.


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