Current Mortgage Interest Rates UK

If you’re thinking about buying a house, you probably want to know what the UK’s current mortgage rates are. We provide weekly updates on average mortgage rates and compare them to the numbers from the previous week because lenders often change the rates for their mortgage products. Furthermore, comparisons between different loan-to-value (LTV) percentages are displayed.

The below figures are correct as of June 19, 2024

What are the current mortgage interest rates in the UK?

As of June 2024, the current mortgage interest rates in the UK are as follows:

Five-Year Fixed-Rate Mortgage:

• Average Interest Rate: 5.03%
• Lowest Available Rate: 4.28%​.

Two-Year Fixed-Rate Mortgage:

• Average Interest Rate: 5.44%
• Lowest Available Rate: 4.75%​ .

These rates can vary based on the loan-to-value (LTV) ratio, with higher LTVs typically attracting higher interest rates. For example, a two-year fixed-rate mortgage with a 95% LTV has an average rate of 6.10%, whereas a similar mortgage with a 60% LTV has a rate of 4.88%​ ​.

The Bank of England’s base rateThe interest rate set by the Bank of England, affects the in..., currently at 5.25%, plays a significant role in influencing these rates, although its impact varies depending on whether the mortgage is fixed or variable ( Mortgageable ​). Tracker and standard variable rateThe interest rate charged by the lender that can vary over t... (SVR) mortgages are more directly affected by changes in the base rate, whereas fixed-rate mortgages remain constant for the duration of the agreed term​ ( NerdWallet: Finance smarter)​​ (Money To The Masses).

For more detailed and personalised advice, consulting with a mortgage adviser or using comparison tools can help you find the best mortgage deal tailored to your financial situation.

Be cautious when choosing a mortgage product. Consider the full range of associated costs, including fees and potential rate changes. It is essential to evaluate your long-term financial stability and consult with a qualified mortgage adviser to ensure you select a mortgage that aligns with your financial goals and circumstances.

Find the Ideal Mortgage Rate for Your Needs

1. RemortgageRefinancing an existing mortgage with a new mortgage.

Remortgaging is the process of moving from your current mortgage to a new one, frequently with a different lender. By obtaining better terms and a cheaper interest rate, this can help you save money.

2. New Purchasers

You may be required to make a lesser deposit on your purchase if this is your first time shopping. It’s critical to investigate different loan options, including tracker-rate and fixed-rate mortgages, to ascertain which best meets your needs.

3. Purchase-to-Let:

A buy-to-let mortgage is designed for people who want to invest in real estate that they plan to rent out rather than occupy. Purchasing a home or apartment to rent out to tenants requires a buy-to-let mortgage.

4. Moving Home

You can choose from a number of mortgage options when you move. You may be able to transfer an existing fixed-term agreement to your new house. Should porting be unfeasible, you’ll probably have to pay a departure charge.

You can apply for a new mortgage on your newly purchased property if your current mortgage’s term has ended or if it has a variable rate.

Help Me Choose: What Are the Different Mortgage Types?

1. Fixed Rate

With a fixed-rate mortgage, you are protected from interest rate hikes and can be sure that your monthly repayments will remain consistent for a predetermined amount of time. These agreements normally run for two or five years, however some lenders provide fixed-rate options with ten-year terms.

1. Monitor Interest rates on tracker mortgages are typically a few percentage points higher than the base rate set by the Bank of England. The base rate and your monthly repayments are subject to fluctuations.

2. Standard Variable Rate The interest rate on a standard variable rate (SVR) mortgage is determined by your lender and is often set a few percentage points higher than the base rate set by the Bank of England. You may be paying more than you need to if you have an SVR mortgage. You can frequently save money by switching to a fixed- or tracker-rate agreement, and there are usually no early repayment penalties.

3. The Variable Rate Discounted:

Similar to a tracker mortgage, a discounted variable-rate mortgage is based on your lender’s SVR rather than the Bank of England base rate. Your monthly repayments may fluctuate since the interest rate is locked at a percentage below your lender’s standard variable rate (SVR), which is subject to change at the lender’s discretion.

4. Interest-Only

You can pay only the interest on your mortgage each month if you have an interest-only mortgage. Compared to a repayment mortgage, the principal amount (the capital) is not repaid until the end of the period, so that monthly payments are reduced. But after the loan term expires, you will need to figure out how to pay back the initial sum.

5. Displacement:

With an offset mortgageA mortgage where the borrower's savings are offset against t..., you can use your savings to lower your mortgage balance and, consequently, your interest rate. You only pay interest on the amount of your mortgage that remains after your savings are subtracted from it.

If the interest rate on your mortgage is greater than the interest you receive from your savings, then offset mortgages can be advantageous.

What’s Happening with Mortgage and Interest Rates Now?

Base rate hikes and their possible effects on mortgage rates have received a lot of media attention. Approximately every six weeks, the Bank of England (BoE) convenes to determine whether to modify the Base Rate, potentially leading to an increase, drop, or no change at all. Since August, the Base Rate has stayed at its present level of 5.25%.

The average interest rate for a five-year fixed-rate mortgage is currently 5.04%, which is not different from the rate from the prior week. In the meantime, the typical rate on a two-year fixed-rate mortgage increased little from 5.42% to 5.44%. The lowest available two-year fixed rate is still 4.75%, but the lowest available five-year fixed rate has dropped from 4.34% to 4.28%.

When Could Mortgage Rates Start to Drop?

Financial markets currently believe that the Base Rate has peaked. Interest rates are predicted to stay stable until 2024, at which point they are predicted to begin to drop. As a result, these decreases can start to show up in fixed-rate mortgage packages.

It is difficult to forecast significant drops in mortgage rates, nevertheless, because several factors influence their movement. These include changes in the pace of inflation, declining swap rates, and the lack of unforeseen shocks to the economy.

Average Monthly Mortgage Repayments by Average House Price

You may be wondering how the average mortgage rates for this week compare to the rates from last week, as well as how they translate into average monthly mortgage repayments. Right now, £228,003 is the average asking price for a property that appeals to first-time buyers.

This means that, if repaid over 25 years, the average monthly mortgage payment for a first-time buyer who secures an average five-year fixed, 85% LTV mortgage is now £1,135 per month.

How Much Can You Borrow with a Mortgage?

An affordability evaluation establishes how much you can borrow with a mortgage, and the loan-to-value (LTV) ratio—which measures how much of your deposit you make—affects your interest rate. LTV, which is a percentage, shows you how much of a mortgage you’ll need compared to the property’s worth that you want to buy.

The LTV decreases with a greater deposit and vice versa. Keeping up with current mortgage rates and knowing what influences them will help you make wiser choices when buying a property. To guarantee you receive the greatest bargain, keep a watch on market developments and speak with financial counsellors.