Current Mortgage Rates UK September 2023

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Comparing mortgage rates is key to keeping your mortgage costs low. It’s also why you should shop around if you’re looking for a new mortgage deal. From finding the best mortgage rates to keeping tabs on the latest mortgage rates in the UK, everything you need to know is right here.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a loan or any other debt secured on it.

How to get the best mortgage rates

When we talk about getting the best mortgage rate, what you really have to do is find the best mortgage rate among the mortgage deals that are most suitable for you and your circumstances. The mortgage rate should be just one of many factors that you assess when looking for a mortgage.

Mortgage rates can vary depending on the type of homebuyer you are, your personal financial situation and credit score, and your intentions.

» MORE: Best mortgage lenders

First-time buyer mortgages

Mortgage rates for first-time buyers tend to be higher than if you’re already on the property ladder. This is because you’re likely to require a larger loan relative to the value of your property – so borrow at a higher loan to value (LTV) – making you a riskier proposition in the eyes of lenders. That you’ve never had a mortgage before also means lenders have less to go on when trying to assess your reliability as a mortgage borrower.

Mortgages for bad credit

It may be possible to get a mortgage if you have bad credit, but it’s likely you’ll need to pay a higher mortgage rate for doing so. Having a bad credit score suggests to lenders that you’ve experienced problems meeting your debt obligations in the past. To counter the risk of problems occurring again, lenders will charge you higher interest rates accordingly. You’re likely to need to source a specialist lender if you have a poor credit score, or a broker that can source you an appropriate lender.

Buy-to-let mortgages

Interest rates on buy-to-let mortgages tend to be higher than on residential mortgages though as a landlord, the idea is that the rent you charge to tenants covers this cost.

Remortgaging

When you remortgage, you’re switching away from a current mortgage deal to a new one. If you’re remortgaging to avoid your current lender’s standard variable rate (SVR), which you’ve either already moved on to, or are about to, because your initial fixed-rate deal is at an end, you’ll want to find a new deal with a lower mortgage rate than the SVR. If you’ve built equity in your property since taking out your current mortgage, you may also find you can borrow at a lower LTV for your new mortgage – and the lower your LTV, the lower mortgage rates tend to be.

Joint mortgages

Joint mortgages come with the same rates to those you’ll find on a single person mortgage. However, if you get a mortgage jointly with someone else, you may be able to access lower mortgage rates than if you applied on your own. This is because a combined deposit may mean you can borrow at a lower LTV where rates tend to be lower. Some lenders may also consider having two borrowers liable for repaying a mortgage is less risky than there only being one.

Are mortgage rates going down?

Fixed mortgage rates have been steadily falling for almost two months, with some lenders making multiple reductions. According to Rightmove, the average rate on five-year fixed-rate mortgages at 75% loan-to-value, if you have a 25% deposit, is now 5.51%, down from the recent high of 6.00% seen towards the end of July.

Some of the recent rate reductions have been attributed to lenders competing more actively for borrowers as the mortgage market has slowed. Many commentators also believe the Bank of England base rate of interest may be nearing its peak. However, mortgage rates still remain considerably higher than earlier in the year.

What are current UK mortgage rates?

The average two-year fixed-rate mortgage rate if you have a 15% deposit/equity has dropped to 6.29%, down from 6.32% a week earlier, while the average rate on a similar five-year fixed-rate mortgage has remained unchanged this week at 5.73%. If you have a smaller deposit or equity of 5%, the average two-year fixed rate of 6.60% has edged down from 6.61% a week earlier, while the average five-year fixed rate has dropped to 5.97%, from 6.03%. All rates are according to Rightmove as at 11 September 2023.

Latest average two-year fixed-rate mortgage rates

Loan to value (LTV)	5 September 2023	11 September 2023	Week-on-week change	⇩ ⇧
60% LTV	5.96%	5.92%	-0.04%	⇩
75% LTV	6.12%	6.08%	-0.04%	⇩
85% LTV	6.32%	6.29%	-0.03%	⇩
90% LTV	6.48%	6.46%	-0.02%	⇩
95% LTV	6.61%	6.60%	-0.01%	⇩

Latest average five-year fixed-rate mortgage rates

Loan to value (LTV)	5 September 2023	11 September 2023	Week-on-week change	⇩ ⇧
60% LTV	5.33%	5.31%	-0.02%	⇩
75% LTV	5.52%	5.51%	-0.01%	⇩
85% LTV	5.73%	5.73%	No change-0.04%	⇔
90% LTV	5.86%	5.84%	-0.02%	⇩
95% LTV	6.03%	5.97%	-0.06%	⇩

Data sourced from Rightmove/Podium. Correct as at 11 September 2023.

Average rates are based on 95% of the mortgage market and products with a fee of around £999.

How mortgage rates work

Mortgage rates are the interest rate you pay to a lender on the mortgage balance you have outstanding. The lower your mortgage rate, the lower your monthly mortgage repayments tend to be, and vice versa.

Different types of mortgage rates

The two main types of mortgage rate available to borrowers in the UK are fixed rates and variable rates.

Fixed-rate mortgage

A fixed-rate mortgage guarantees that your mortgage rate, and therefore your monthly repayments, won’t change during the set fixed-rate period that you choose. This can help with budgeting and means you are protected against a rise in mortgage costs if interest rates generally begin to increase. Similarly, you’ll miss out if interest rates start to fall while you are locked into a fixed-rate mortgage.

Variable rate mortgages

With a variable rate mortgage, your mortgage rate has the potential to rise and fall, and take your monthly repayments with it. This may work to your advantage if interest rates decrease, but means you’ll pay more if rates increase. Variable rate mortgages can take the form of:

a tracker mortgage, where the mortgage rate you pay is typically set at a specific margin above the Bank of England base rate, and will automatically change in line with movements in the base rate.
a standard variable rate, or SVR, which is a rate set by your lender that you’ll automatically move on to once an initial rate period, such as that on a fixed-rate mortgage, comes to an end. SVRs tend to be higher than the mortgage rates on other mortgages, which is why many people look to remortgage to a new deal when a fixed rate mortgage ends.
a discount mortgage, where the rate you pay tracks a lender’s SVR at a discounted rate for a fixed period of time.

» MORE: What are the differences between fixed and variable rate mortgages?

How rate changes could affect your mortgage payments

Depending on the type of mortgage you have, changes in mortgage rates have the potential to affect monthly mortgage repayments in different ways.

Fixed-rate mortgage

If you’re within your fixed-rate period, your monthly repayments will remain the same until that ends, regardless of what is happening to interest rates generally. It is only once the fixed term expires that your repayments could change, either because you’ve moved on to your lender’s SVR, which is usually higher, or because you’ve remortgaged to a new deal, potentially at a different rate.

Tracker mortgage

With a tracker mortgage, your monthly repayments usually fall if the base rate falls, but get more expensive if it rises. The change will usually reflect the full change in the base rate and happen automatically, but may not if you have a collar or a cap on your rate. A collar rate is one below which the rate you pay cannot fall, while a capped rate is one that your mortgage rate cannot go above.

Standard variable rate mortgage

With a standard variable rate mortgage, your mortgage payments could change each month, rising or falling depending on the rate. SVRs aren’t tied to the base rate in the same way as a tracker mortgage, as lenders decide whether to change their SVR and by how much, although it is usually a strong influence that SVRs tend to follow, either partially or in full.

What other mortgage costs, fees and charges should you be aware of?

When considering which mortgage to take out, it’s always important to take into account the other costs you’re likely to face, and not just focus on the mortgage rate alone.

Stamp duty

Stamp duty is a tax you may have to pay to the government when buying property or land. At the time of publication, if you’re buying a residential home in England or Northern Ireland, stamp duty only becomes payable on properties worth over £250,000. Different thresholds and rates apply in Scotland and Wales, and if you’re a first-time buyer or buying a second home.

» MORE: Stamp duty calculator

Mortgage deposit

Your mortgage deposit is the amount of money you have available to put down upfront when buying a property – the rest of the purchase price is then covered using a mortgage. Even a small deposit may need to be several thousands of pounds, though if you have a larger deposit this can potentially help you to access lower mortgage rate deals.

Mortgage fees

Among the charges and fees which are directly related to mortgages, and the process of taking one out, you may need to pay:

Arrangement fees

Sometimes also referred to as the completion or product fee, this is a charge paid to the lender for setting up the mortgage. It may be possible to add this on to your mortgage loan although increasing your debt will mean you will be charged interest on this extra amount, which will increase your mortgage costs overall.

Booking fees

This is essentially a charge made to reserve a mortgage while your application is being considered, though it may also be included in the arrangement fee. It’s usually non-refundable, meaning you won’t get it back if your application is turned down.

Valuation fees

This pays for the checks that lenders need to make on the property you want to buy so that they can assess whether its value is in line with the mortgage amount you want to borrow. Some lenders offer free house valuations as part of their mortgage deals.

House survey fees

You may want to arrange a house survey so that you can check on the condition of the property and the extent of any repairs that may be needed. A survey should be conducted for your own reassurance, whereas a valuation is for the benefit of the lender and may not go into much detail, depending on the type requested by the lender.

Conveyancing fees

These cover the legal fees that are incurred when buying or selling a home, including the cost of search fees for your solicitor to check whether there are any potential problems you should be aware of, and land registry fees to register the property in your name.

Higher lending charge

Some lenders apply this charge if you have a small deposit and are borrowing at a higher LTV. Lenders use the funds to buy insurance that protects them against the risk your property is worth less than your mortgage balance should you fail to meet your repayments and they need to take possession of your home.

Broker or advice fees

If you get advice or go through a broker when arranging your mortgage, you may need to pay a fee for their help and time. If there isn’t a fee, it’s likely they’ll receive commission from the lender you take the mortgage out with instead, which is not added to your costs.

Early repayment charges

These are fees you may have to pay if you want to pay some or all of your mortgage off within a deal period. Early repayment charges are usually a percentage of the amount you’re paying off early and tend to be higher the earlier you are into a mortgage deal.

» MORE: Compare mortgages

Key mortgage terms explained

Loan to value (LTV)	Your loan-to-value ratio is the amount you wish to borrow through a mortgage expressed as a percentage of the value of the property you’re buying.
Initial interest rate	This is the interest rate you’ll pay when you’re still within the initial fixed-rate period of a mortgage deal.
Initial interest rate period	This is the period of time your initial interest rate will last, before your lender switches you over to its SVR.
Annual Percentage Rate of Charge (APRC)	The APRC is a single percentage figure designed to help you compare the annual cost of different mortgage deals.
Annual overpayment allowance (AOA)	This is the amount a lender will let you overpay on your mortgage each year without being charged a fee.
Early Repayment Charge (ERC)	This is a charge you may need to pay if you want to pay off some or all of your mortgage earlier than you agreed with your lender.
Mortgage term	A mortgage term is the full period of time over which the mortgage contract is taken out for – it should not be confused with the deal term. At the end of the term you will have paid off the full debt or all of the interest depending on what type of mortgage you took.

The average rate on a five-year fixed-rate mortgage if you have a 40% deposit/equity is 5.31%, down from 5.33% a week earlier. For an equivalent two-year fixed-rate mortgage, the average rate is 5.92%, down from 5.96%. If you have a 10% deposit/equity, the average five-year fixed rate is 5.84%, down from 5.86%, while the average two-year fixed rate is 6.46%, down from 6.48%. All rates are according to Rightmove as at 11 September 2023.

A mortgage rate is the interest rate a lender charges on the mortgage amount that you borrow. Mortgage interest rates may be fixed, guaranteeing that it will remain the same for a certain length of time, or variable, meaning it is possible that it can fluctuate up and down.

Mortgage providers regularly review the mortgage rates that they offer to take account of the costs involved with funding its lending activities, their latest priorities in terms of target borrowers, and wider conditions in the market. As a result, when searching for a new mortgage, it’s always a good idea to consider various lenders and take the time to compare different mortgages. Crucially, you need to bear in mind that a deal offering the best mortgage rate may not necessarily be the one that is most suitable for you. The mortgage rate is important, but at the same time you need to consider other factors, such as the charges and fees attached to a mortgage, the type of mortgage that you need, and the mortgage term that you want.

Average rates on fixed-rate mortgages have been steadily falling over the past seven weeks. Some also believe that the base rate of interest, which currently sits at 5.25%, is near its peak. However, many different factors can affect mortgage rates, and it is impossible to say for certain if rates will carry on dropping over the rest of the year or if they’ll start to rise again.

The interest rate is the percentage of a loan amount that a lender charges for borrowing money, whereas the APRC, or annual percentage rate of charge, is a calculation expressed as a percentage that takes into account both the interest rate and associated costs of a mortgage across its lifetime. The aim of the APRC is to help borrowers make meaningful comparisons between mortgage deals.

Taking the time to compare mortgage rates and deals, making sure your credit score is in good shape, saving for a larger deposit and paying off existing debts can all help improve your chances of getting a good mortgage deal.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a loan or any other debt secured on it.

Information on this page is a guide. It does not constitute advice, recommendation or suitability to your needs or financial circumstances. Seek qualified mortgage advice before proceeding with a mortgage product.

NerdWallet strives to keep its information accurate and up to date. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site. All financial products and services are presented without warranty. When evaluating products, please review the financial institution’s Terms and Conditions.

About the Author

Tim Leonard

Tim is a writer and spokesperson at NerdWallet and holds the Chartered Insurance Institute (CII) Level 3 Certificate in Mortgage Advice. He has over 20 years’ experience writing about almost…

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