Fixed and tracker products across all LTVs rose after the Bank of England opted to raise the base rate last month, according to new Moneyfacts data.

Average mortgage rates on both fixed and tracker products rose in December after the Bank of England opted to raise the base rate from 0.10% to 0.25%.

The average two-year tracker rose 0.17% to 1.75%, according to Moneyfacts. The average two-year fixed deal climbed 0.04% to 2.38% and the average five-fixed deal climbed 0.02% to 2.66%. It’s worth noting, these are averages spanning all loan-to-value ratios and the best available rates can be much lower.

The Bank of England became the first major central bank to raise interest rates in December after inflation hit 4.6% the previous month, its highest level in a decade. Pricing in financial markets suggest there could be as many as two more rate hikes over the course of 2022.

That makes January an opportune moment for borrowers to lock in a new deal. Mortgage offers are often valid for as many as six months and though rates are rising, other aspects of the mortgage market have become more favourable to borrowers as activity has eased back from record highs.

The number of mortgages granted to UK borrowers looking to purchase homes, for example, was relatively unchanged at 67,000 in November, close to the pre-pandemic average of 66,700, according to the Bank of England. As activity eases, competition among lenders for borrowers increases, weighing on any interest rate increases and driving product choice, which is already running at its highest level for 13 years, according to Moneyfacts.

If you are thinking of remortgaging or purchasing a home this year, why not speak to one of our experienced mortgage brokers? Knight Frank Finance covers the whole market, so you know you’ll be getting the most up-to-the minute, comprehensive advice.