Best Mortgage Rates - January 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 January 2023

After high drama with mortgages in 2022, 2023 has had a much calmer start so far. Last year saw mortgage rates on new deals increasing throughout the year and then shooting up following the mini-budget in September 2022. But from November 2022 onwards, rates available on fixed rate mortgages started falling, a trend that continued even after the Bank of England made its ninth consecutive increase to the base rate of interest on 15 December, hiking it from 3% to 3.5%, a level not seen since the 2008 financial crisis.

At the start of January 2023, the lowest rates on 2 and 5 year fixed rate mortgages nudged lower than they were in the wake of the Bank’s December decision, while the lowest rates available on 3 and 10 year fixed rate mortgages remained the same.

But the further hike in the base rate was more bad news for those on tracker mortgages or their lender’s Standard Variable Rate who faced increases in their monthly mortgage payments. Even before the most recent hike in the base rate, L&C’s remortgage tracker warned that Standard Variable Rates had continued to climb.

So with more competitive mortgage deals available and SVRs increasing it’s even more important than ever to check if you’re on the best deal on your current mortgage.

The easiest way to do this is to use L&C’s Rate Check service. Plus, L&C are fee-free, unlike many brokers which charge fees that can amount to thousands of pounds. So you can save even more.

What if I already have a mortgage offer?

If you’ve already got a mortgage offer, you should still take stock. That’s because you may be able to find a better mortgage deal today than the one you’ve chosen.

David Hollingworth from explains: “Homeowners could make substantial savings compared with the rates that were on offer only a month or so ago following the impact of the mini budget.Those that sought to grab a rate in the panic should review their rate to make sure it still offers the best option now the market is shifting. Securing a better rate now doesn’t close the door to reviewing the options and good advice should help keep borrowers abreast of change without incurring additional cost.”

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 our remortgage page.

(Video) Homeowners with fixed rate loans are facing a 'mortgage cliff' | The Business | ABC News

Anecdotally, some buyers are said to be securing new mortgage deals between exchange and completion. But due to the timescales involved in getting a mortgage offer it’s likely that this will only be an option for someone if they have a longer period between exchange and completion. Or if the existing lender has improved its rates and would enable a switch to a new rate without having to start the whole process again. If you’re asking should I remortage now and time is of the essence, it’s even more important to use a mortgage broker.

What will happen to mortgage rates in 2023?

Looking at interest rates first; moreincreases in the base rate of interest are expected in 2023. Although analysts’ predictions vary on how high the peak will be in 2023, ranging from 4.25% to 4.75%. However, even if the base rate hits 4.75%, this is lower than was predicted in the aftermath of the mini budget when it was feared interest rates would hit 6% in 2023.

But despite further increases in interest rates predicted, some experts believe mortgage rates on new deals are still set to fall this year.

How do increases to the base rate affect my mortgage?

The Bank of England’s next announcement on the base rate is on 2 February – but how will this impact your current mortgage? If it’s hiked again, 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 January 2023

The key thing to remember is that while experts can make predictions, no one really knows what’s going to happen with mortgage rates for certain and you need to work out the best decision you can for you. So if you’re looking for a first mortgage or are planning toremortgagein the next few months you should start looking at your options asap. The best wayto protect yourself from a mortgage rate riseis byasking a fee-free mortgage broker to check you’re on the best rate.

(Video) The FED Just Crashed Interest Rates (Major Changes Ahead)

Best 2 year fixedratemortgage

The lowest rate on a 2 year fix this month is from First Direct at 4.74%. You’ll need a 40% deposit and it has a booking fee of £490. Leeds Building Society also offer a rate on a 2 year fix of 4.74%, you’ll need a 35% deposit although it has a higher fee of £999. At the start of December the best available rate on a 2 year fix was 5.04% from Leeds Building Society, dropping to 4.84% from MPowered Mortgages by mid-December.

Best 3 year fixedratemortgage

The best rate on a 3 year fix this month is from MPowered Mortgages at 4.74%. You’ll need a 40% deposit and it has an arrangement fee of £999, although you’ll get £500 cashback for purchases. This was the lowest rate on a 3 year fix by the middle of last month. But the best rate on a 3 year fix at the start of December was from Platform, the intermediary brand of the Co-operative Bank, at 5.04%.

Best 5 year fixedratemortgage

While if you’re looking for a five year fix, the joint best rate available this month is from First Direct at 4.39%. It has a £490 booking fee and you’ll need a 40% deposit. Leeds Building Society also offers 4.39% on a 5 year fix; you’ll need a 35% deposit and it has an arrangement fee of £999.

This compares to the 4.49% offered in the middle of last month by MPowered Mortgages and Virgin Money, and the 4.84% offered by Leeds Building Society at 4.84% at the start of December.

Best10 year fixed ratemortgage

Meanwhilethe best rate on a 10 year fix this month is from Halifax at 4.04%. You’ll need a deposit of 40% and it has an arrangement fee of £999, with £250 cashback. But it’s only available on remortgages. For purchases, the best rate on a 10 year fix this month is also from Halifax at 4.50%. You’ll need a 40% deposit and it has an arrangement fee of £999. This was the best rate available in the middle of last month while at the start of December the best rate on a 10 year fix was with Virgin Money at 4.89%.

Best variableratemortgages

The lowest rate on a variable rate mortgage this month is from Newcastle Building Society which offers a 2 Year Discounted Variable Rate Mortgage with an initial rate of 3.29%. You’ll need a 20% deposit and it has an arrangement fee of £999.

Best Buy to Let mortgages rates

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

Best Green Mortgage rates

While if you’re looking for a green mortgage, Coventry Building Society has extended its ‘Green Together Reward’ offer until the end of March.It entitles eligible borrowers to £500 cashback on all deals, once energy efficiency improvements have been made to the property and can be claimed up to a year after the mortgage completes.There’s a list of eligible improvements and borrowers must spend at least £2,500 – find out more by . Coventry Building Society currently offers a competitive 2 year fixed rate at 4.85% to 60% LTV with a £999 fee.

(Video) Must watch if buying a home in 2023 | Big Changes in #Mortgage Rates #interestrates #realtortips

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?

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 what mortgage deals are on offer 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.

(Video) Mortgage Rates jan 2023

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.

(Video) NEW 2023 FHA Loan Requirements — The Ultimate Guide For First Time Buyers

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.


1. How I removed squatters in less than a day.
(United Handyman Association “Handyman Answers”)
2. Homebuilders Pivot Away from Constructing New Homes
(Jason Walter)
3. Book Home loan @6.4% | Best Home Loan 2022 Interest rates All Bank Compare | Govt Private Bank rates
(Sahaj Info)
4. Should You Buy a House Now, Or Wait Until 2024?
(Matt Brighton)
5. Fixed Rate vs Variable Rate Mortgage 2023 - Which is better?
(Nolan Matthias)
6. US Mortgage Market just COLLAPSED (worse than 2008)
(Reventure Consulting)


Top Articles
Latest Posts
Article information

Author: Arielle Torp

Last Updated: 07/28/2023

Views: 5932

Rating: 4 / 5 (41 voted)

Reviews: 88% of readers found this page helpful

Author information

Name: Arielle Torp

Birthday: 1997-09-20

Address: 87313 Erdman Vista, North Dustinborough, WA 37563

Phone: +97216742823598

Job: Central Technology Officer

Hobby: Taekwondo, Macrame, Foreign language learning, Kite flying, Cooking, Skiing, Computer programming

Introduction: My name is Arielle Torp, I am a comfortable, kind, zealous, lovely, jolly, colorful, adventurous person who loves writing and wants to share my knowledge and understanding with you.