Average UK mortgage rates

 

Average mortgage rate for new business

We show in the chart below the average mortgage rates for new business. These are the average rates charged on mortgages that were arranged this month.

Average mortgage rates for new business were falling steadily until the start of the global COVID-19 pandemic. The fall in floating mortgage rates accelerated as the pandemic took hold. Mortgage rates initially increased as the UK was engulfed by the COVID-19 pandemic, but, in the main, fell through out 2021. However, following a rise in Bank Rate in December 2021, mortgage rates started to increase in 2022 and rising mortgage rates is likely to bethe theme of 2022.

The latest mortgage rate data from the Bank of England shows that average mortgage rates increased significantly during May 2022, it seems clear to us that a turning point has been reached and passed, and we expect the path or mortgage rates to be upward from here for the time being.

The latest average mortgage rates are 

 


Average UK mortgage rates fixed rate mortgage floating rate mortgage Twindig

 

The changes to average mortgage rates for new business are as follows:

 

  Floating Rate Fixed Rate Overall 
Last month 5.4% 7.7% 7.1%
Last 12 months  +10.2% +2.6% +2.6%

 

The full data used in the graphs can be found at the bottom of this article

 

 

Average 2 year-fixed rate mortgage rates by LTV 

95% LTV mortgages

Average 2 year fixed rate 95% LTV mortgage rates were broadly flat in the year leading up to the COVID-19 pandemic. During the early stages of the pandemic, 95% LTV mortgage rates fell, but in the summer of 2020 2-year fixed-rate 95% LTV mortgage rates increased significantly. The rates fell throughout 2021 so far and are now below pre-pandemic levels. Given the recent increase in Bank Rate we expect the average 95% LTV mortgage rate to increase during 2022, and the leap in mortgage rates in March is what will be the start of a medium term upward mortgage rate journey, in our view.

 

90% LTV mortgages

Average 2 year fixed rate 90% LTV mortgage rates  fell by around 20% from June 2018 to the start of the COVID-19 pandemic. They have also increased significantly since the first UK COVID-19 lockdown almost doubling between April 2020 and December 2020, however, like the 95% LTV mortgage rates the 90% LTV rates fell throughout 2021, although as with the 95% LTV mortgage rates, we expect them to rise in 2022 as the Bank of England raises Bank Rate to combat inflation. After bottoming out in January 2022, 90% LTV mortgage rates are definitely on the rise, increasing from 1.95% to an average of 2.86% in May.

 

75% LTV mortgages

Average 2 year fixed rate 75% LTV mortgage rates fell by around 20% from June 2018 to the start of the COVID-19 pandemic. They increased during the early stages of Lockdown I, but started to fall towards the end of last year. Mortgage rates for 75% LTV mortgages are now lower than their pre-pandemic levels. Average mortgage rates for 75% LTV mortgages have been rising since October 2021 when mortgage rates nudged up from 1.20% to 1.29% bucking the trend of the mortgage rates for higher LTV mortgages and they have continued to rise. In May 2022 we saw the average mortgage rates for 2 year-fixed rate 75% LTV mortgages rise for the eighth month in a row to 2.63% However, at 2.63% these mortgage rates are still very low indeed when comparing to their historic levels.

 

The latest average 2 year fixed rate mortgage rates

 

 

Average UK mortgage rates by LTV Twindig

 

The most recent changes to average 2 year fixed rate mortgage rates are as follows:

  75% LTV 90% LTV  95% KTV 
Last month +11.4% +10.0% +8.14%
Last 12 month  +78.9% -13.6% -17.8%

 

The full data used in the graphs can be found at the bottom of this article

 

Table 1: Average mortgage rates for new buiness

We show in the table below the average mortgage rates for fixed rate mortgages, floating rate mortgages and the overall average mortgage rates;

 

Date Floating (%) Fixed (%) Overall (%)
Jun 18    2.02 2.13 2.13
Jul 18 1.92 2.12 2.11
Aug 18 1.93 2.13 2.12
Sep 18 2.03 2.12 2.13
Oct 18 2.12 2.12 2.13
Nov 18 2.09 2.14 2.14
Dec 18 2.10 2.14 2.15
Jan 19 2.10 2.10 2.11
Feb 19 2.05 2.10 2.10
Mar 19 2.10 2.11 2.13
Apr 19 2.13 2.09 2.11
May 19 2.05 2.08 2.09
Jun 19 2.10 2.02 2.03
Jul 19 2.12 2.04 2.06
Aug 19 2.05 2.05 2.06
Sep 19 2.06 2.01 2.02
Oct 19 2.05 1.96 1.98
Nov 19 1.99 1.87 1.88
Dec 19 2.03 1.87 1.89
Jan 20 2.05 1.85 1.87
Feb 20 2.06 1.80 1.82
Mar 20 1.88 1.83 1.84
Apr 20 1.56 1.79 1.77
May 20 1.48 1.75 1.74
Jun 20 1.53 1.80 1.79
Jul 20 1.54 1.76 1.75
Aug 20 1.59 1.74 1.73
Sep 20 1.66 1.75 1.75
Oct 20 1.76 1.79 1.80
Nov 20 1.78 1.84 1.84
Dec 20 1.86 1.91 1.91
Jan 21 1.87 1.85 1.85
Feb 21 1.92 1.92 1.92
Mar 21 1.91 1.96 1.96
Apr 21 1.94 1.88 1.89
May 21 1.96 1.90 1.91
June 21 1.95 1.95 1.95
July 21 1.96 1.83 1.84
August 21 1.95 1.82 1.83
September 21 1.92 1.78 1.79
October 21 1.82 1.58 1.60
November 21 1.68 1.49 1.51
December 21 1.60 1.58 1.59
January 22 1.60 1.58 1.59
February 22 1.69 1.59 1.60
March 22 1.89 1.73 1.74
April 22 2.05 1.81 1.83
May 22 2.16 1.95 1.96

 

 

Table 2: 2 year-fixed rate mortgage rates by LTV

We show in the table below the average mortgage rates for two year fixed rate mortgages for 75%, 90% and 95% LTV ratios 

  75% LTV  90% LTV 95% LTV
Jun 18 1.74 2.37 3.95
Jul 18 1.75 2.30 3.78
Aug 18 1.75 2.28 3.61
Sep 18 1.71 2.12 3.38
Oct 18 1.80 2.27 3.33
Nov 18 1.75 2.28 3.23
Dec 18 1.73 2.24 3.18
Jan 19 1.72 2.23 3.04
Feb 19 1.70 2.17 2.99
Mar 19 1.70 2.17 2.97
Apr 19 1.66 2.15 2.92
May 19 1.65 2.19 2.93
Jun 19 1.64 2.18 2.95
Jul 19 1.61 2.15 2.96
Aug 19 1.59 2.10 2.96
Sep 19 1.55 2.09 2.99
Oct 19 1.47 2.07 2.99
Nov 19 1.41 2.08 2.99
Dec 19 1.42 2.07 3.00
Jan 20 1.41 2.05 3.02
Feb 20 1.40 1.97 3.02
Mar 20 1.40 1.94 3.02
Apr 20 1.38 1.89 3.07
May 20 1.42 1.96 3.17
Jun 20 1.41 2.19 2.72
Jul 20 1.45 2.50 2.58
Aug 20 1.60 2.78 3.78
Sep 20 1.75 3.29 3.95
Oct 20 1.94 3.52 4.13
Nov 20 1.92 3.72 4.20
Dec 20 1.86 3.75 4.20
Jan 21 1.71 3.63 4.16
Feb 21 1.61 3.49 4.10
Mar 21 1.56 3.38 4.16
Apr 21 1.49 3.38 4.01
May 21 1.47 3.31 3.88
June 21 1.39 3.09 3.74
July 21 1.29 2.79 3.53
August 21 1.23 2.48 3.43
September 21 1.20 2.16 3.22
October 21 1.30 2.03 2.97
November 21 1.52 2.02 2.91
December 21 1.56 1.95 2.77
January 22 1.64 1.95 2.77
February 22 1.78 2.03 2.72
March 22 2.14 2.38 2.80
April 22 2.36 2.60 2.95
May 22 2.63 2.86 3.19