What are the current UK mortgage rates?

What are the current UK mortgage rates?

If you’re thinking about buying a home, you might be wondering what the current mortgage rates are in the UK.

Lenders change the rates of their mortgage products regularly. That’s why we update the average mortgage rates weekly and compare how they’ve changed since the previous week. You can also compare the rates across a range of loan to value (LTV) percentages.

What’s happening with mortgage rates now?

There has been lots of news about Base Rate rises and how they can impact mortgage rates. The Bank of England (BoE) meet about every six weeks to decide whether the Base Rate should go up or down, or stay the same. On 22 June, the Base Rate increased to 5%, from 4.5% in May.

Our mortgage expert, Matt Smith, says: “After the market turbulence over the last two months, the signs are there that mortgage rates are reaching a peak. There’s been an increase in average rates compared with last week, but we may now see some lenders begin to cut rates as soon as the coming days. However, any cuts to rates are likely to be small, at least to begin with, as lenders will be looking to balance their desire to reduce rates with the need to account for any further market surprises as the economy looks to get onto a more stable footing for the long term. 

“Those looking to take out a mortgage soon will have been heartened by last week’s positive inflation news, which saw June’s rate fall by more than was anticipated. However, it takes some time for lenders to respond to market conditions and feed these through to mortgage rates offered to borrowers. And today’s numbers confirm that some of the reports of immediate mortgage rate falls at the tail end of last week may have been slightly premature”, he adds. 

The current average mortgage rate for a five-year fixed, 85% loan-to-value mortgage is 6.18%, up from 5.90% last week. The lowest rate for this type of mortgage is 5.77%. 

What are the current UK mortgage interest rates?

On Tuesday 25 July 2023

Average fixed-term mortgage rates for home-buyers with 5-10% deposits

Average fixed-term mortgage rates for home-buyers with 15-25% deposits

Average fixed-term mortgage rates for home-buyers with 40% deposits

These rates are provided by Podium and are an average based on 95% of the mortgage market. All rates are based on products with a circa £999 fee.

Average monthly mortgage repayments by average house price

You might be wondering what this week’s average mortgage rates could mean for average monthly mortgage repayments, and how this compares to the average rates offered last week.  

The average monthly mortgage payment on a first-time buyer type property* for someone taking out a five-year fixed, 85% LTV mortgage is now £1,256**, up by £32 per month compared to last week. 

*First-time buyer homes includes all 2-bed properties and smaller that come to market (houses and flats); second-stepper homes includes 3-4 bed properties, excluding 4-bed detached houses; and top-of-the-ladder represents asking prices at the top end of the market, covering all 5-bed homes and above, as well as 4-bed detached houses.
**Based on a 5-year fixed, 85% loan-to-value, 25-year term mortgage
Source: Rightmove House Price Index and Podium data

How much can you borrow with a mortgage?

The amount you can borrow with a mortgage is determined by an affordability assessment and your interest rate is determined by the amount of deposit you have, otherwise known as loan-to-value (LTV).

LTV is expressed as a percentage, and it reflects the size of the mortgage you need as a proportion of the value of the home you want to buy. The bigger the deposit you have, the lower the LTV, and vice-versa.

Source – Rightmove