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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) 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 are giving early 2024 movers the late Christmas present of lower mortgage rates. After the reduction in swap rateswe saw before the holidays, this is starting to filter through to mortgage rates now that the festivities are over and the working year has begun. There is still some room for lenders to reduce rates further over the coming weeks, and with the early promising signs of home-mover activity we’re seeing at the start of this year, lenders who want to price more competitively and take on even more new business could be met with keen interest by those looking to take out a mortgage soon.” 

The current average mortgage rate for a five-year fixed rate mortgage is 5.02%, down from 5.03% last week. The current average rate for a two-year fixed rate mortgage is 5.43%, down from 5.44% last week. The lowest available five-year fixed rate is 4.23%, and the lowest available two-year fixed rate is 4.60%. 

What are the current UK mortgage interest rates?

On Wednesday 3 January 2024

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

Loan to value (LTV) Term Average rate 28 Dec 2023  Average rate 3 Jan 2024 Weekly Change 
95% 2-year fixed 5.83%  5.81%  -0.02% 
95% 5-year fixed 5.44%  5.40%  -0.04% 
90% 2-year fixed 5.70%  5.69%  -0.01% 
90% 5-year fixed 5.18%  5.16%  -0.02% 


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

Loan to value (LTV) Term Average rate 28 Dec 2023 Average rate 3 Jan 2024 Weekly Change 
85% 2-year fixed 5.57%  5.55%  -0.02% 
85% 5-year fixed 5.12%  5.10%  -0.02% 
75% 2-year fixed 5.26%  5.23%  -0.03% 
75% 5-year fixed 4.95%  4.94%  -0.01% 


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

Loan to value (LTV) Term Average rate 28 Dec 2023  Average rate 3 Jan 2024 Weekly Change 
60% 2-year fixed 4.82%  4.82%  -0.00% 
60% 5-year fixed 4.44%  4.44%  -0.00% 


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 £219,984. 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 £1,104per month if repaying over 25 years, down from £1,129 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 Principlewhich 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 Jackson-Stops, Northampton.