If you’re considering buying a home, you may be curious about the current mortgage rates in the UK.
What’s the latest on mortgage and interest rates?
There’s been a lot of attention on the Bank of England’s (BoE) Base Rate increases and their potential effect on mortgage rates. The BoE meets roughly every six weeks to decide whether the Base Rate should rise, fall, or remain unchanged.
In early August, the Base Rate was reduced to 5%, the first cut in over four years. This was after being held steady at 5.25% since August 2023. This followed inflation reaching the Bank of England’s 2% target in May for the first time since 2021, and remaining at that level in June.
When could mortgage rates start to decline?
Another Base Rate cut is anticipated by the end of the year, with projections suggesting it could drop to around 3.25% by December 2028, though this will depend on broader economic conditions.
However, predicting significant drops in mortgage rates remains challenging due to various influencing factors. These include inflation trends, declining swap rates, and the absence of unexpected economic shocks.
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 depends on the size of your deposit, referred to as loan-to-value (LTV).
LTV is expressed as a percentage, representing the size of the mortgage relative to the value of the home you intend to buy. The larger your deposit, the lower the LTV, and vice versa.
To get an estimate of how much you could borrow, you can use a Mortgage Calculator. For a more tailored result, applying for a Mortgage in Principle can bring you closer to securing a mortgage offer.
Want to speak to a mortgage adviser?
CR Real Estate work in partnership with The Residential Mortgage Hub to offer trusted advice that’s tailored to your needs.
Book your FREE appointment with their mortgage and protection advisors online. They have access to over 12,000 products from 90+ lenders on the mortgage market. Their team will handle the whole of the application process for you and deal with any challenges that may arise.
Please note: CR Real Estate is not authorised to provide financial advice. The information and opinions in this article is not intended as financial advice and should not be relied upon for financial decisions. Please consult a regulated mortgage adviser for guidance.
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