While many homeowners have seen their mortgage payments rise significantly since the Bank of England started to repeatedly increase interest rates from 2021 onwards, some lucky households – such as Katrina Croft and her husband – are still hanging on to rock-bottom rates. From the pandemic period and earlier, mortgage rates of well below 2 per cent were available to some, and Ms Croft is still on the 1.49 per cent rate she signed up to in 2020. Though these are a distant memory in the current market, she is on one, paying just £165 a month to live in her four-bed house in Hersham, Surrey. She managed to lock in on a five-year fixed-rate deal at the end of April 2020 with an interest rate of just 1.49 per cent. For context, the average rate for a five-year fix on 7 November inn2024 was 4.7 per cent, according to Rightmove.

'We knew how incredibly lucky we were'

Ms Croft’s house was bought for £725,000 and she has an interest-only £132,000 mortgage. Before she bought the house, she had been renting it for £2,500 a month – meaning her monthly payments have dropped by a massive £2,335. “I can’t tell you how delighted we were when we were able to lock in for five years. We knew at the time how incredibly lucky we were to get such a great rate,” she told The i Paper. The PR consultant said that because she and her husband are both self employed, having such low mortgage payments has taken the pressure off – and allowed them to “enjoy the finer things in life and go on a few nice holidays”. She is “apprehensive” about where mortgage rates will be when her fixed-rate deal is up (referring to April 2025, speaking last November). “I’m bracing myself to be paying a lot more than we were,” she said. (Photo: Sakchai Vongsasiripat/Getty)

Enjoying the fruits of low rates

While she is expecting to be paying about three times as much by then, she says the jump is “not going to cripple us” because she and her husband both earn well and the mortgage is interest-only. She explains that they have a lot of equity in the house and their plan is to downsize in the next five years or so to pay off the borrowing costs. Ms Croft and her husband have a blended family with five children between them who are in their late teens and twenties, so they expect they won’t need as big a house once more of their children move out. She is not alone in still enjoying the fruits of low rates. (Photo: Nuthawut Somsuk/Getty/iStockphoto)

'I realise how good it was'

Ed Fraser, 40, has an even better rate of just 1.48 per cent on the home he shares with his wife and two children. The family live in Reading, Berkshire, and pay just over £1,000 for their house. They managed to get their five-year fixed rate deal in 2022, prior to that September’s mini-Budget, which saw mortgage rates rise. “Now I look back, I realise how good it was but it was almost even better,” Mr Fraser said. We were offered 0.99 per cent and we didn’t quite get it because they then revalued the house, but we still got a great deal.” Mr Fraser, who runs financial coaching business The Parent Money Coach, said he rarely comes across anyone else with a mortgage rate lower than his. In hindsight, he now wishes he had locked in for longer. His mortgage deal will be up in early 2027, and while it’s some time away Mr Fraser expects he will be paying more.

More wiggle room

Forecasting what mortgage rates will be at this point in the future is difficult, but brokers have consistently said that rates of below 2 per cent are unlikely to return in the medium term. Rates are generally based on long-term predictions for where the Bank of England base rate will go in the future, and in 2020 to 2021, rates were at historically low levels. Economists generally accept that rates of 3 per cent or more may become the norm in the future. Mr Fraser thinks the family will have “more wiggle room” to absorb the cost by the the time he renews as his young boys will be out of nursery. (Photo: Aaron Chown/PA)

Shielded from the cost of living somewhat

Life will be “a lot cheaper” by the time his children are in primary school, he said. “If the mortgage rate rise had been during the time when they’re both in childcare then it would have been incredibly difficult,” he added. Mr Fraser does feel his family has been shielded from the impact of the cost of living crisis somewhat because of his low mortgage payments. “It hasn’t been such a significant thing for us – we were fortunate we were able to get such a low rate at that point,” he said. (Costs accurate at the time of first publciation, November 2024) (Photo: Daniel Leal/AFP via Getty)