Exploring the Latest Mortgage Rates in the UK

Posted on Monday, 6 May, 2024

For those contemplating purchasing a home, the current mortgage rates in the UK are a pertinent consideration.

Mortgage lenders regularly adjust the rates of their products. Consequently, we provide weekly updates on average mortgage rates, allowing for easy comparison with the previous week’s figures. Moreover, you can assess rates across various loan-to-value (LTV) percentages.

Presently, there’s much discussion about Base Rate fluctuations and their potential ramifications on mortgage rates. The Bank of England (BoE) convenes approximately every six weeks to deliberate on whether to increase, decrease, or maintain the Base Rate, which has remained at 5.25% since August.

As of now, the average mortgage rate for a five-year fixed-rate mortgage stands at 4.97%, up from 4.89% last week. Similarly, the average rate for a two-year fixed-rate mortgage is 5.38%, compared to 5.29% the previous week. Notably, the lowest available rates are 4.16% for a five-year fixed-rate mortgage and 4.61% for a two-year fixed-rate mortgage.

According to our mortgage expert, Matt Smith, the upcoming Bank of England meeting will be pivotal in shaping mortgage rates leading into the summer. Recent global economic uncertainties have fueled speculation about the timing of the first interest rate cut, contributing to a slight uptick in average mortgage rates. However, unlike the spike witnessed last year at this time, the current rise in rates appears more moderate. Despite these increases, the actual impact on average monthly payments remains relatively limited, as evidenced by the continued positive activity in the home-mover market throughout this bustling spring season.

At present, financial markets indicate that the Base Rate has reached its pinnacle. Projections suggest that interest rates will remain stable until 2024, after which a decline is expected. Consequently, fixed-rate mortgage products are anticipated to gradually incorporate these reductions.

However, pinpointing the exact timing of substantial drops in mortgage rates poses a challenge, primarily due to their dependence on various factors. These factors include inflation trends, fluctuations in swap rates, and the absence of unforeseen economic upheavals.

Assessing the Impact on Monthly Mortgage Payments

Interested in understanding the implications of this week’s average mortgage rates on monthly repayments, and how they compare to rates offered last week?

Consider this: the current average asking price for a typical first-time buyer property stands at £227,110. Based on this, a first-time buyer opting for an average five-year fixed, 85% loan-to-value (LTV) mortgage would pay approximately £1,108 per month over a 25-year repayment period.

Please note: Lakin & CO 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 specialist mortgage provider, we are able to recommend a mortgage broker to you. Please get in touch if you would like us to arrange for them to contact you.

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).