Are you considering purchasing a home and curious about the UK’s latest mortgage rates? Mortgage rates offered by lenders are frequently updated. We provide a weekly refresh of the average mortgage rates and show their changes from the previous week. It’s also possible to compare rates across different loan to value (LTV) ratios.
Recent Developments in Mortgage and Interest Rates
There’s been a lot of talk about the Base Rates climbing and their effect on mortgage rates. The Bank of England (BoE) makes a decision every six weeks to raise, lower, or maintain the Base Rate. The current Base Rate is 5.25%, unchanged since August.
The average five-year fixed mortgage rate is now 4.84%, up from 4.80% last week. For two-year fixed mortgages, the rate has risen from 5.15% to 5.22%. The most competitive rates available now are 4.13% for a five-year fixed mortgage and 4.46% for a two-year fixed mortgage.
Matt Smith, our mortgage specialist, says, “We’ve noticed a slight increase in the average rates recently. However, as the swap rates — the lender’s baseline mortgage costs — have dropped in the past few days, we might be nearing the end of this rising rate trend.
“Everyone’s focus is now on the inflation figures that will be released next week and the Bank of England’s Base Rate decision on March 21. These events will likely indicate where rates might go in the coming weeks.”
What Are the Current UK Mortgage Interest Rates?
As of Wednesday, March 13, 2024:
For home-buyers with a 5-10% deposit: (Tables indicate slight increases in rates across different LTV rates and terms)
| Loan to value (LTV) | Term | Average rate 5 Mar 2024 | Average rate 13 Mar 2024 | Weekly Change |
|---|---|---|---|---|
| 95% | 2-year fixed | 5.80% | 5.90% | +0.10% |
| 95% | 5-year fixed | 5.40% | 5.47% | +0.07% |
| 90% | 2-year fixed | 5.38% | 5.44% | +0.06% |
| 90% | 5-year fixed | 4.94% | 4.98% | +0.04% |
For home-buyers with a 15-25% deposit: (Tables show small increases in rates across various LTV rates and terms)
| Loan to value (LTV) | Term | Average rate 5 Mar 2024 | Average rate 13 Mar 2024 | Weekly Change |
|---|---|---|---|---|
| 85% | 2-year fixed | 5.18% | 5.21% | +0.03% |
| 85% | 5-year fixed | 4.75% | 4.78% | +0.03% |
| 75% | 2-year fixed | 5.04% | 5.06% | +0.02% |
| 75% | 5-year fixed | 4.72% | 4.73% | +0.01% |
For home-buyers with a 40% deposit: (Tables show minimal rises in rates across different LTV rates and terms)
| Loan to value (LTV) | Term | Average rate 5 Mar 2024 | Average rate 13 Mar 2024 | Weekly Change |
|---|---|---|---|---|
| 60% | 2-year fixed | 4.65% | 4.68% | +0.03% |
| 60% | 5-year fixed | 4.33% | 4.37% | +0.04% |
These rates are averages supplied by Podium, covering about 95% of the mortgage market, all based on products with around a £999 fee.
When Might We See Mortgage Rates Decrease?
Financial markets currently predict that the Base Rate has hit its high point. Expectations suggest that interest rates will stay consistent into 2024, and subsequently start to decrease. This should reflect in fixed-rate mortgage reductions.
It’s challenging to forecast significant drops in mortgage rates as they depend on several elements such as how inflation trends, falling swap rates, and the absence of sudden economic turmoil.
Monthly Mortgage Repayments Based on Average House Prices
You may be wondering how this week’s average mortgage rates influence the typical monthly mortgage payments and how these compare to the rates offered last week.
The present average asking price of a home that’s commonly sought by first-time buyers is £224,815. For someone taking out an average five-year fixed mortgage at 85% loan-to-value (LTV), repaying it over 25 years, the average monthly payment would be £1,093.
This data comes from Rightmove’s House Price Index and Podium’s analyses. Note that “first-time buyer homes” encompasses all properties with up to two bedrooms, including houses and flats.
How much can you borrow with a mortgage?
The sum you’re able to borrow for a mortgage is decided by an affordability check. Additionally, your interest rate will hinge on the size of your initial deposit, which is related to LTV. LTV represents the percentage of the property’s value that your mortgage will cover. A larger deposit means a lower LTV and vice versa.
To gauge how much you might be eligible to loan, you can use a mortgage calculator. For more accurate insights, consider applying for a Mortgage in Principle, which moves you a step closer to securing a mortgage offer. You’ll also benefit from learning about the different mortgage types and picking a mortgage term that suits your current and future needs.
