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What are today's UK mortgage rates?

In this article, we break down what the average current mortgage rates in the UK are and explain what's happening in the mortgage market.
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What are the current interest rates for mortgages?

On 8 June 2023 average mortgage rates in the UK are:

(Average rates from Mojo Mortgages)

The above are the average mortgage rates today for various products across the market. These won't necessarily be available to you, and are not the only product types available.

What is the average mortgage interest rate I can get?

This depends on the type of product you choose, your financial circumstances and how much deposit you have. A bigger deposit, will give you a lower loan-to-value (LTV) which usually means that you can access lower interest rates.

The rates will also differ based on the product type, so fixed-rate mortgages may have a higher initial rate, but stay the same for the whole deal length, whereas variable rate mortgages can start out cheaper, but can go up over the course of your deal.

In today's volatile mortgage market rates are changing regularly, so it's worth speaking to a whole-of-market mortgage broker who can compare deals to find the best mortgage rates available to you.

"There’s been a lot in the news over the past few months around mortgage rates changing and deals being pulled. However, there are plenty of deals available. So, if you need a mortgage, whether you’re a first-time buyer, home mover or need to remortgage, get in touch with an expert to discuss the options available to you."

Aidan Darrall, Mortgage Expert at Mojo Mortgages

Will interest rates rise or fall?

Some experts predict that the base rate could be as low as 3% by the end of 2026. But while UK mortgage rates have generally fallen from the dramatic highs seen after the 2022 Autumn mini-budget, individual rates have fluctuated depending on how base rate changes impacted them.

In response to rising inflation, the Bank of England has increased the base rate 12 times in succession, with the most recent rise on 11 May 2023 bringing it up to 4.5%. The Bank of England's Monetary Policy Committee will make their next decision on the base rate on 22 June 2023.

How high will interest rates go?

Historically, the highest base rate recorded was 17% back in 1979.

It's not currently predicted to reach those heights again any time soon, although most analysts expect the base rate to be at 5% by the end of 2023. This could, of course, change depending on economic conditions. Staying on top of current mortgage news is a good way to keep a check on rate changes.

However, increases in the base rate don't necessarily mean that all mortgage rates will also increase. Tracker mortgages are directly linked to the base rate, so will always be impacted by increases and decreases. Fixed-rate mortgages, on the other hand, have actually declined since November 2022 - despite numerous base rate rises.

This is because rates rose significantly as a result of economic turbulence following the mini-budget in September 2022. Once economic conditions calmed, lenders started reducing rates again.

What should I do if rates increase?

If you're concerned about your interest rate rising, then you may want to consider:

  • Fixing your mortgage – this will keep your rate the same for a set period of time. If your current deal hasn't ended, however, make sure you're aware of any early repayment charges (ERCs)

  • Locking in a new rate – if you're due to remortgage within the next six months, you can lock in a new rate now and switch when your deal ends, avoiding an ERC. If rates fall before your deal ends, you can switch again to get a better option

What should I do if rates decrease?

If you're worried that interest rates will fall after you've secured a mortgage, and you'll miss out on the benefits of switching to a lower rate, you could:

  • Opt for a shorter-term fixed-rate mortgage – this means you're locked into that rate for less time and it will be easier to switch mortgages when rates do fall

  • Consider a variable-rate mortgage, such as a tracker deal, that will benefit immediately from a fall in the base rate – but keep in mind that it works both ways, so if rates rise, you'll end up with higher monthly repayments

Will UK property prices fall?

While significant demand has pushed prices higher in the last couple of years, some have predicted that demand for homes will fall due to increasing mortgage costs, resulting in fall in house prices.

The latest House Price Index (May 2023) from Zoopla reported that UK house price annual growth slowed to 3% from 4.1% the previous month. However, they also reported that demand appears to be showing signs of recovery as the number of new sales rose.

Although the rate by which house prices are increasing has slowed, they are yet to fall.

Whether they fall later in 2023 will likely depend on whether inflation continues to decrease and what happens to mortgage rates (and therefore buyer demand) as a result.

What to do if you need a mortgage

Looking for a mortgage in the current climate probably seems particularly daunting.

That's why it's especially important to get expert advice from someone who can find you the right deal.

With mortgage rates changing recently, it's important to get expert advice to make sure you find the right deal for you. Mojo Mortgages is an award-winning broker who can provide free advice and secure a mortgage for you.