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 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. The Base Rate is currently 5.25%, and has been held at this level since August.
Our mortgage expert Matt Smith says: “Lenders have accelerated mortgage rate reductions over the last week, and this week’s positive inflation news will only further fuel confidence among lenders that they can continue to drop rates over the final weeks of this year, barring any last minute surprises.
“With the financial markets anticipating that rates have peaked and will fall back next year, coupled with recent positive wage data, lenders could begin to review their affordability criteria.
It’s been a challenging year, with higher rates and the squeeze on affordability meaning that some home-movers have had to reassess their budgets and look at options such as extending mortgage terms, or searching for cheaper properties. An easing of affordability criteria would be positive news for many movers looking to take out a mortgage, and is a trend to watch heading into 2024.”
The current average mortgage rate for a five-year fixed, 85% loan-to-value mortgage is 5.35%, down from 5.43% last week. The lowest rate for this type of mortgage is 4.93%.
What are the current UK mortgage interest rates?
On Tuesday 14 November 2023
Average fixed-term mortgage rates for home-buyers with 5-10% deposits
| Loan to value (LTV) | Term | Average rate 7 Nov 2023 | Average rate 14 Nov 2023 | Weekly Change |
|---|---|---|---|---|
| 95% | 2-year fixed | 6.22% | 6.20% | -0.02% |
| 95% | 5-year fixed | 5.75% | 5.73% | -0.02% |
| 90% | 2-year fixed | 6.03% | 5.91% | -0.12% |
| 90% | 5-year fixed | 5.50% | 5.40% | -0.10% |
Average fixed-term mortgage rates for home-buyers with 15-25% deposits
| Loan to value (LTV) | Term | Average rate 7 Nov 2023 | Average rate 14 Nov 2023 | Weekly Change |
|---|---|---|---|---|
| 85% | 2-year fixed | 5.94% | 5.87% | -0.07% |
| 85% | 5-year fixed | 5.43% | 5.35% | -0.08% |
| 75% | 2-year fixed | 5.55% | 5.59% | +0.04% |
| 75% | 5-year fixed | 5.15% | 5.20% | +0.05% |
Average fixed-term mortgage rates for home-buyers with 40% deposits
| Loan to value (LTV) | Term | Average rate 7 Nov 2023 | Average rate 14 Nov 2023 | Weekly Change |
|---|---|---|---|---|
| 60% | 2-year fixed | 5.35% | 5.17% | -0.18% |
| 60% | 5-year fixed | 4.94% | 4.78% | -0.16% |
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?
Right now, the financial markets are predicting that the Base Rate may be at its peak. It’s thought interest rates will remain flat for most of 2024, before starting to come down. And we can expect fixed-rate mortgage products to start to take on some of these reductions.
We’ve seen mortgage rates edge down slowly in recent weeks, in response to the positive inflation figures. 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 inflation continuing to decrease, 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 £223,426. Based on that, the average monthly mortgage payment for a first-time buyer taking out an average five-year fixed, 85% LTV mortgage, is now £1,149 per month if repaying over 25 years, down from £1,193 a year ago.
Source: Rightmove House Price Index and 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 image for this article was provided courtesy of Hudson Moody, Micklegate.
