The Bank of England has just raised the base rate by 0.5% to 2.25%. It’s the seventh rise in a row and the highest it’s been since November 2008. The Bank was originally planning on making the announcement on September 15th, but out of respect for the Queen, they postponed it until 22nd September.

There was speculation it could be a record-breaking 0.75% rise, so there is some relief at the smaller rise. The money markets are now factoring in that it will keep on rising until February of next year, peaking at 4%, with typical mortgage rates of 4.4%, before they fall back to 4% in April. There are, however, a lot of variables that could come into play during that period, not least a new Prime Minister, so the outlook could change quite quickly.

Even before the announcement, mortgages rates were continuing their rise, with even the very best deals now around 3.5% and the average well over 4%. There has also been a reduction in the number of available deals as lenders consolidate, although they are at least lasting a little longer before being withdrawn from the market – up from a low of 17 days to 28.

Below is a selection of this month’s best buys from Moneyfacts.co.uk:

Two-year fixed rates: 3.44% from Post Office Money. Product fee £1,495. 75% LTV.
3.44% from Penrith BS. Product fee £999. 90% LTV.

Three-year fixed rates: 3.77% from Coventry BS. Product fee £999. 75% LTV.
3.83% from Bank of China. Product fee £1,594. 60% LTV.

Five-year fixed rates: 3.49% from Barclays. Product fee £999. 60% LTV.
3.59% from Barclays. Product fee £1,999. 60% LTV.

Discounted variable: 1.98% For 2 years. From Progressive BS. Product fee none. 60% LTV.
1.99% For 2 years. From Bath BS. Product fee £999. 80% LTV.

BUY-TO-LET (BTL)

Best two-year fixed rate: 3.89% from The Mortgage Works. Arrangement 2.00% Advance. 65% LTV.

Five-year fixed rate: 3.99% from The Mortgage Works. Arrangement 2.00% Advance. 65% LTV

Best Discounted variable: 2.29% for 2 years. from Bath BS. Arrangement £999. 80% LTV.

The information we provide is our personal opinion and should not be relied upon for financial advice. Should you need financial advice or guidance please contact an appropriate professional.