Mortgage rates in the UK have been fluctuating significantly in recent months. This article provides an update on the best available rates and recent market trends.
The 2-year and 5-year fixed rates have recently stabilised following adjustments related to May’s inflation figures. The Bank of England’s base rate projections influenced these changes.
Several banks, including Santander, NatWest, and Barclays, have recently reduced their rates. This article will explore the most competitive fixed and tracker rate mortgage deals currently available.
Key Takeaways
- Mortgage rates have stabilised after initial increases due to inflation data.
- Recent rate cuts from major lenders indicate increased lender confidence.
- The article covers the best fixed and tracker rate mortgage deals available now.
Overview of UK Mortgage Rates
Mortgage rates in the UK have seen some changes recently. After May’s inflation figures came out, there was an initial rise in rates. However, things have since stabilised. The Bank of England’s expected delay in cutting the base rate until later in 2024 played a key role in this adjustment.
In recent times, five-year fixed rates have slightly decreased. The duration mortgage products stay on the market, known as their shelf life, has gone back up to around 30 days. This indicates growing confidence among lenders.
Several big names like Santander, First Direct, Barclays, NatWest, Yorkshire Building Society, and Halifax have all cut their rates. Checking mortgage rate tables regularly is beneficial since many rates are starting to decrease.
Fixed-Rate Deals
2-Year Fixed Rates:
- Halifax (60% LTV): 4.63%
- NatWest (80% LTV): 4.83%
- Clydesdale Bank (90% LTV): 5.19% with substantial fees, around £1,800
5-Year Fixed Rates:
- Around 4% for a 60% LTV with HSBC offering some of the best rates.
- Lloyds Bank (90% LTV): 4.71%
10-Year Fixed Rates:
- Rates range from 4.64% to 5.28% depending on LTV
Tracker Rates
Tracker rates are currently higher than fixed-rate deals, reflecting the expectation that the Bank of England base rate might decrease soon.
- Best 2-Year Tracker: 4.99%
- 90% LTV 2-Year Tracker: 5.45%
- 5-Year Tracker: Nearing 6%
For the full range of rates, including options for first-time buyers and buy-to-let deals, reviewing the latest updates on rate tables is recommended.
Recent Changes in the Mortgage Market
Mortgage rates in the UK have experienced some fluctuations recently, showing signs of stabilisation in the past few weeks. The average rates for 2-year and 5-year fixed mortgages initially saw a rise following the release of May’s inflation figures. This spike was due to predictions that the Bank of England would delay cutting the base rate until later in 2024, as inflation was higher than expected.
As the market adjusted, some rates have seen slight reductions. For example, several 5-year fixed rates have decreased. Over the last two weeks, rate reductions were noted from major lenders like Santander, First Direct, Barclays, NatWest, and Yorkshire Building Society. Even Halifax joined in with its own rate cuts.
The shelf life of mortgage products, which had decreased to around 15 days, has now increased to approximately 30 days. This indicates improved confidence among lenders.
Here’s a summary of the current top rates:
- 2-year fixed rate: Halifax offers around 4.63% with a 60% loan to value, NatWest is at 4.83% for 80% loan to value, and Clydesdale Bank provides 5.19% for 90% loan to value.
- 5-year fixed rate: HSBC leads with rates just above 4% for 60% loan to value, while Lloyds Bank offers 4.71% for a 90% loan to value.
- 10-year fixed rate: These range from 4.64% to 5.28% depending on the loan to value.
- Tracker rates: The best 2-year tracker deal stands at 4.99%, while a 5-year tracker rate is closer to 6%.
Lender fees can be considerable, with some reaching up to £1,800, like the fee for Clydesdale’s 2-year fixed rate. Be mindful of these additional costs when calculating the total expense of a mortgage.
Current Best Mortgage Rate Deals
Two-Year Fixed Rate Deals
| Lender | Loan to Value (LTV) | Rate | Fees |
|---|---|---|---|
| Halifax | 60% | 4.63% | £999 |
| NatWest | 80% | 4.83% | £1,200 |
| Clydesdale Bank | 90% | 5.19% | £1,800 |
Five-Year Fixed Rate Deals
| Lender | Loan to Value (LTV) | Rate | Fees |
|---|---|---|---|
| HSBC | 60% | 4.01% | £999 |
| Lloyds Bank | 90% | 4.71% | £1,200 |
Ten-Year Fixed Rate Deals
| Loan to Value (LTV) | Rate Range |
|---|---|
| 60%-90% | 4.64% – 5.28% |
Tracker Rate Deals
| Lender | Loan to Value (LTV) | Type | Rate |
|---|---|---|---|
| Various | 60% | Two-Year | 4.99% |
| Various | 90% | Two-Year | 5.45% |
| Various | 60%-90% | Five-Year | ~6% |
Note: Tracker rates are generally higher than fixed rates due to expectations of a decline in the Bank of England’s base rate.
Fixed Rate Mortgage Deals
2-Year Fixed Rate Deals
For those looking at 2-year fixed rate mortgages, Halifax offers a rate of 4.63% with a 60% loan to value (LTV). If you need a higher LTV, NatWest provides an option at 4.83% for an 80% LTV. For a 90% LTV, Clydesdale Bank’s rate is 5.19%. Keep in mind that the fees can be substantial, such as £1,800 on the Clydesdale product.
5-Year Fixed Rate Deals
5-year fixed rate mortgages are slightly above 4% for a 60% LTV, with HSBC offering some of the most competitive rates. Those looking for a 90% LTV can consider Lloyds Bank, which has a rate of 4.71%. These longer-term products provide stability for those planning to stay in their homes for a while.
10-Year Fixed Rate Deals
Though 10-year fixed rate deals may not be as popular, they provide long-term rate security. Depending on the LTV, you can find rates ranging from 4.64% to 5.28%. These plans are suitable for those who prefer to lock in their rates for a decade, avoiding future rate hikes.
Tracker Rate Mortgage Deals
2-Year Tracker Rate Deals
For those looking for shorter-term flexibility, 2-year tracker rate deals can be a good choice. Recently, the best rate available stands at 4.99%. This deal is for a 60% loan-to-value ratio. For a higher loan-to-value ratio, such as 90%, the rates increase to around 5.45%. These options provide a way to benefit from potential future rate cuts.
5-Year Tracker Rate Deals
If you’re considering a longer-term tracker rate deal, 5-year options are available. These come with higher rates compared to shorter-term deals. Currently, the rates are closer to 6%. This reflects market predictions that expect base rates to eventually decline. Longer-term deals can offer stability, even though they come at higher initial costs.
First-Time Buyer Mortgage Deals
For those purchasing their first home, there are several mortgage options available. These deals typically cater to different loan-to-value (LTV) ratios, which is the amount of the loan compared to the value of the property.
Fixed-Rate Mortgages
2-Year Fixed Rate Deals:
- Halifax: 4.63% for a 60% LTV
- NatWest: 4.83% for an 80% LTV
- Clydesdale Bank: 5.19% for a 90% LTV, with fees around £1,800
5-Year Fixed Rate Deals:
- HSBC: Rates just above 4% for a 60% LTV
- Lloyds Bank: 4.71% for a 90% LTV
Tracker Mortgages
2-Year Tracker Deals:
- Best Rate: 4.99%
- 90% LTV: Around 5.45%
5-Year Tracker Deals:
- Rates are closer to 6%
Considerations
When choosing a mortgage, check both the interest rates and the associated fees. Some deals include hefty fees that might influence your decision.
Regularly updated mortgage tables can help keep you informed of the latest rates and offers available.
These deals offer competitive rates and terms. However, it is always important to consider how each option fits your financial situation.
Mortgage Deals for Buy-to-Let
Buy-to-let mortgage deals are specifically designed for those purchasing properties to rent out. These mortgages typically have different criteria compared to residential mortgages.
Here is a snapshot of some of the standout deals currently available in the market:
Best Rates
- Santander: offers a 2-year fixed rate at 5.27% for a 60% loan-to-value (LTV).
- Barclays: provides a 5-year fixed rate at 5.50% for a 75% LTV.
Things to Consider
When choosing a buy-to-let mortgage, consider the following factors:
- Interest Rates: Fixed rates offer consistency, while variable rates can fluctuate.
- Loan to Value (LTV): Higher LTV ratios often come with higher interest rates.
- Fees: Look out for arrangement fees which can vary significantly between lenders.
Comparison Table
Below is a comparison of some key buy-to-let mortgage deals:
| Lender | Term | Interest Rate | LTV | Fees |
|---|---|---|---|---|
| Santander | 2-year | 5.27% | 60% | £1,495 |
| Barclays | 5-year | 5.50% | 75% | £1,299 |
| NatWest | 3-year | 5.34% | 70% | £995 |
| HSBC | 5-year | 5.60% | 80% | £1,500 |
It’s essential to regularly check for updates as rates can change frequently. Make sure to review the full terms and conditions before committing to a mortgage deal.
Additional Tips
- Shop Around: Don’t settle for the first deal you find. Compare different lenders.
- Professional Advice: Consider consulting a mortgage advisor to find the best deal tailored to your needs.
- Review Regularly: Market conditions change. Keep an eye on how your mortgage rate compares over time.