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 rates now?
There has been lots of news about Base Rate rises and how they can impact mortgage 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. On 22 June, the Base Rate increased to 5%, from 4.5% in March.
Our mortgage expert, Matt Smith, says: “Rates are up by an average of 0.13% this week, which though slightly higher than last week’s 0.12%, is weighted much more towards shorter-term rather than longer-term fixed-deals. This reflects the ongoing view that rates will have to go higher to address inflation in the short term, but markets still believe they will fall back in the long-term.
“With even the best-buy short-term fixed-deals now approaching 6%, and the average mortgage rate across all two-year fixed Loan-to-Value (LTV) products now topping 6%, it is likely to be a blow to those looking to take out a mortgage soon, and some may be having to reassess what they can afford or temporarily pause their plans.
“However we are continuing to see a healthy level of buyer demand, with enquiries to go and view properties for sale still above 2019 levels. Many determined movers are navigating rather than stepping away from the market, with the gradual increase in mortgage rates we’ve seen over the last few weeks perhaps easier to manage than the sudden shock of the post-mini-budget period, when many products rose more than 1% in a week”, he adds.
The current average mortgage rate for a five-year fixed, 85% loan-to-value mortgage is 5.69%, up from 5.65% last week. The lowest rate for this type of mortgage is 5.37%.
What are the current UK mortgage interest rates?
On Tuesday 11 July 2023
Average fixed-term mortgage rates for home-buyers with 5-10% deposits
| Loan to value (LTV) | Term | Average rate 4 Jul 2023 | Average rate 11 Jul 2023 | Weekly Change |
|---|---|---|---|---|
| 95% | 2-year fixed | 6.50% | 6.75% | +0.25% |
| 95% | 5-year fixed | 6.00% | 6.10% | +0.10% |
| 90% | 2-year fixed | 6.22% | 6.33% | +0.11% |
| 90% | 5-year fixed | 5.80% | 5.81% | +0.01% |
Average fixed-term mortgage rates for home-buyers with 15-25% deposits
| Loan to value (LTV) | Term | Average rate 4 Jul 2023 | Average rate 11 Jul 2023 | Weekly Change |
|---|---|---|---|---|
| 85% | 2-year fixed | 6.06% | 6.21% | +0.15% |
| 85% | 5-year fixed | 5.65% | 5.69% | +0.04% |
| 75% | 2-year fixed | 5.94% | 6.09% | +0.15% |
| 75% | 5-year fixed | 5.53% | 5.56% | +0.03% |
Average fixed-term mortgage rates for home-buyers with 40% deposits
| Loan to value (LTV) | Term | Average rate 4 Jul 2023 | Average rate 11 Jul 2023 | Weekly Change |
|---|---|---|---|---|
| 60% | 2-year fixed | 5.81% | 6.09% | +0.28% |
| 60% | 5-year fixed | 5.41% | 5.59% | +0.18% |
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.
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 average monthly mortgage payment on a first-time buyer type property* for someone taking out a five-year fixed, 85% LTV mortgage is now £1,204**, up by £5 per month compared to last week.
*First-time buyer homes includes all 2-bed properties and smaller that come to market (houses and flats); second-stepper homes includes 3-4 bed properties, excluding 4-bed detached houses; and top-of-the-ladder represents asking prices at the top end of the market, covering all 5-bed homes and above, as well as 4-bed detached houses.
**Based on a 5-year fixed, 85% loan-to-value, 25-year term mortgage
Source: Rightmove House Price Index and Podium data
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 Principle which 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 is provided courtesy of Boardwalk Property Co, Bristol.
Article source: https://www.rightmove.co.uk/news/articles/property-news/current-uk-mortgage-rates/
