Mortgage Rates Today

When you take out a mortgage, you're taking out a loan which you'll need to repay. In addition to the loan, you have to pay interest on the amount you borrowed.

The amount of interest you pay is determined by your mortgage rate. The higher this is, the more expensive your monthly repayments will be. That's why it's good to try and get a deal with as low a mortgage interest rate as possible

A good mortgage interest rate depends on market conditions, along with the size of your deposit and financial circumstances. If you have a large deposit (ideally 40% or more) and excellent credit history, you should be able to get some of the lowest mortgage rates available. However, if have a small deposit and your credit rating isn't so strong, you'll likely find you have to pay a more expensive mortgage rate.

This is because lenders tend to base the rate on how much risk they're taking on by letting you borrow from them. The higher the deposit you put down, the lower the LTV ratio and less risk they're taking on. Similarly, if you have a great credit history, lenders are likely to see you as less of a risk. A mortgage broker can help you find the the most suitable mortgage rate for your circumstances.

It really depends on your circumstances. If you're already on, or about to fall onto a high SVR (standard variable rate), then you'll need to consider whether it's worth paying more interest while you wait to see whether rates fall further.

However, keep in mind that the market has seen significant volatility in recent years, and just because rates have fallen from their highest levels in recent history, the base rate remains high for the time being.

If you plan to move soon, then it may be worth staying on an SVR for a short time, as there are no ERCs to pay when you do look at a new mortgage deal. However, it's a good idea to take guidance from a broker on your mortgage comparison if you're uncertain on your best move.

It is possible to find 30 year, and even some longer fixed-rate mortgage deals than that in the UK these days. But this is typically far more common in the USA and Europe, as our longer-term fixed rate deals still tend to be fairly pricey, and hard to find.

However, there are multiple pros and cons to consider when it comes to locking in a mortgage deal for a very long time. It's a good idea to look at whether a long term fixed-rate mortgage is the right option for you, before tying in for 30 years.

If you're buying your first home, one of the most important factors is your personal financial circumstances. So while the market conditions, in terms of mortgage rates and house prices should also be a factor, it's a good idea to ensure you have a good deposit, and strong affordability regardless.

You can monitor house prices via Zoopla's monthly house price index, and keep up with what's going on in the UK mortgage world on our mortgage news page. However, ultimately, even in a peak buyers market, ensure you're in the best personal position too.

There are several factors that impact mortgage rates changing, which include:

• The Bank of England base rate Mortgage rates fluctuate based on many factors, with main ones being the Bank of England’s base rate, which serves as a benchmark for how much lenders charge to loan money. 

• Inflation The government adjusts the Bank of England base rate to manage inflation. They raise it to slow down spending or lower it to stimulate growth, and mortgages tend to follow suit. 

• Swap rates Fixed-rate mortgage deals are closely tied to swap rates, which are the interest rates that banks charge each other for borrowing. When swap rates rise, it typically becomes more expensive for mortgage lenders to borrow, causing lenders to reprice their fixed-rate mortgage deals.

• Perceived risk If the economy looks shaky, mortgage lenders may raise rates to cover the risk of people defaulting on their loan.
  

If you’re in a fixed-rate mortgage, your mortgage rate won’t change for the entire length of the term. You’ll only face the change when your fixed term ends. 

If you’re on a standard variable rate mortgage, lenders can change the rate whenever they want. It usually follows the base rate, but SVRs can be high, so even if rates drop slightly, you still may be paying more than you need to.

For those with a tracker mortgage, your interest is directly linked to the Bank of England base rate. When it changes, your monthly payments will change, most likely within the following month. 

Dutch-style mortgages are named as such based on similar mortgage products on the continent. The difference is that they provide longer fixed-term deals with interest rates that decline automatically as you pay the mortgage off.

This is intended to save time and money by reducing the need to regularly remortgage at the end of a fixed term. Not many UK lenders currently offer this type of product, however, if popular, there is always the potential that others will follow suit.

The government were looking into the potential to offer a 99% mortgage scheme at the beginning of 2024, and while there is no official stance on this at the time of writing, the FCA suggests that this idea has since been scrapped by the chancellor.

There is currently one lender offering an effectively 99% mortgage, in that they accept £5000 deposit to purchase a property 'up to' the value of £500,000. There is also one 100% mortgage product on the market.

However, it's important to fully understand the risks involved with taking out a low or zero deposit mortgage.

One of the most commonly asked question relating to mortgage rates is when they will come down. However, while average rates are often quoted in the press, it's important to understand that every lender sets their rates based upon their own best guesses. This is why in the same week we can see some lenders push their rates up and others cut them.

There are many factors that come into play when lenders determine mortgage rates, with the base rate and swap rates being major considerations. However, ultimately, even the most skilled financial analysts can only venture an educated guess of when mortgage rates are likely to fall across the board.

The best way to stay up to date with current average rates is to bookmark this page, and always ensure you speak to a mortgage broker who can help you find the best mortgage deals available.

The Bank of England base rate is used by the organisation to help manage inflation. When inflation is low and they want to encourage borrowing and spending, the Bank of England will lower the base rate, as this make loans more affordable.

When they want to reduce inflation, the Bank of England will increase the base rate. The idea is that this will discourage spending and encourage saving. With mortgages, it depends on what kind of deal you have as to how base rate changes will affect your rate.

You can find out more in our guide to the Bank of England base rate.