Rightmove plc

08/01/2024 | News release | Archived content

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 and interest rates now?

There has been lots of news about Base Rate rises and how they can impactmortgage rates. The Bank of England (BoE) meetabout every six weeks to decide whether the Base Rate should go up or down, orstay the same.

This week, the Base Rate was cut for the first time in more than four years, to 5%, after being held at 5.25% since August 2023. This follows inflation falling to the Bank of England's 2% target for the first time since 2021 in the month to May, and remained at 2% in the month to June.

Our mortgage expert, Matt Smith, says: "The highly anticipatedBase Rate cut has finally arrived, and while those looking to take out a mortgage soon shouldn'texpect to see drastically lower mortgage rates, we would expect the downward trend we'vestarted to see continue. This sets us up for hopefullyfurther cuts to come, and when we have seen further reductions tothe Base Rate, people should really start to see the impact.

"However, it's important to keep in mind that mortgage rates are widely expected to eventually settle at higher levels than previously, with the market view that Base Rate may eventually fall to about 3.25%," he adds.

The current average mortgage rate for a five-year fixed rate mortgage is 4.87%, down from 4.88% last week. The current average rate for a two-year fixed rate mortgage is 5.25%, down from 5.27% last week. The lowest available five-year fixed rate is 4.03% and the lowest available two-year fixed rate is 4.39%.

What are the current UK mortgage interest rates?

On Wednesday 31 July 2024

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

Loan to value (LTV) Term Average rate 24 July 2024 Average rate 31 Jul 2024 Weekly Change
95% 2-year fixed 5.96% 5.96% +0.00%
95% 5-year fixed 5.48% 5.48% +0.00%
90% 2-year fixed 5.59% 5.58% -0.01%
90% 5-year fixed 5.13% 5.12% -0.01%

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

Loan to value (LTV) Term Average rate 24 July 2024 Average rate 31 July 2024 Weekly Change
85% 2-year fixed 5.28% 5.27% -0.01%
85% 5-year fixed 4.92% 4.91% -0.01%
75% 2-year fixed 5.11% 5.08% -0.03%
75% 5-year fixed 4.76% 4.73% -0.03%

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

Loan to value (LTV) Term Average rate 24 July 2024 Average rate 31 July 2024 Weekly Change
60% 2-year fixed 4.62% 4.59% -0.03%
60% 5-year fixed 4.21% 4.19% -0.02%

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.

When could mortgage rates start to drop?

A further cut to Base Rate has been forecasted by the end of the year. And by December 2028, it could fall to about 3.25%, although this depends on what's happening in the wider economy.

But it's difficult to predict when we could start to see more sizeable drops in mortgage rates, mostly because their movement is dependent on several factors. Including what happens with inflation,falling swap rates, and no unexpected shocks to the economy. 

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 current average asking price of a typical first-time buyer property* is £227,924, for someone taking out an average five-year fixed, 85% LTV mortgage, is now £1,122per month if repaying over 25 years, compared with £1,254per month a year ago (when the average first-time buyer property asking price was £225,552).

Source: Rightmove House Price Indexand Podium data
*First-time buyer homes includes all 2-bed properties and smaller that come to market (houses and flats).

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.

A good way to find out how much you could borrow is to use a Mortgage Calculator. And to get a personalised result by applying for a Mortgage in Principle which will take you one step closer to a mortgage offer.

Read more about the different types of mortgages and how to choose a mortgage term that meets your needs, both now and in the future.

The header imagefor this article was provided courtesy of Hunters, York

Please note: Rightmove is not authorised to give financial advice; the information and opinions provided in these articles are not intended to be financial advice and should not be relied upon when making financial decisions. Please seek advice from a regulated mortgage adviser.