UK Mortgage Rates History Chart

How have mortgage interest rates changed over time in the UK? Here we explore the historical timeline in more detail. 

Over the years and previous decades, mortgage interest rates have changed in accordance with the Bank of England base rate.

Below we explore the trends and factors that impacted them and how things may look in the future.

PS Please refer to our mortgage interest forecasting for the next 5 years here.

Average Mortgage Interest Rate UK 25 Years

The table below shows the average mortgage interest rates for various types of mortgages in the UK from 2000 to the current year.

Year	2-Year Fixed Rate	3-Year Fixed Rate	5-Year Fixed Rate	10-Year Fixed Rate	2-Year Variable Rate
2000	6.5%	6.2%	6.0%	6.5%	6.3%
2001	5.8%	5.6%	5.5%	5.9%	5.7%
2002	5.2%	5.0%	5.0%	5.3%	5.1%
2003	4.8%	4.6%	4.5%	4.9%	4.6%
2004	4.5%	4.3%	4.3%	4.6%	4.2%
2005	4.4%	4.2%	4.2%	4.4%	4.1%
2006	4.6%	4.4%	4.4%	4.6%	4.3%
2007	5.0%	4.8%	4.8%	5.0%	4.7%
2008	6.0%	5.8%	5.7%	6.0%	5.6%
2009	4.0%	3.8%	3.7%	4.0%	3.6%
2010	3.5%	3.3%	3.3%	3.6%	3.2%
2011	3.8%	3.6%	3.5%	3.9%	3.4%
2012	3.6%	3.4%	3.4%	3.7%	3.2%
2013	3.5%	3.3%	3.3%	3.6%	3.1%
2014	3.4%	3.2%	3.2%	3.5%	3.0%
2015	3.2%	3.0%	3.0%	3.3%	2.8%
2016	3.1%	2.9%	2.8%	3.2%	2.6%
2017	3.0%	2.8%	2.7%	3.1%	2.5%
2018	2.9%	2.7%	2.6%	3.0%	2.4%
2019	2.8%	2.6%	2.5%	2.9%	2.3%
2020	2.7%	2.5%	2.4%	2.8%	2.2%
2021	2.6%	2.4%	2.3%	2.7%	2.1%
2022	3.5%	3.3%	3.2%	3.6%	3.1%
2023	5.0%	4.8%	4.7%	5.1%	4.6%
2024	4.7%	4.5%	4.4%	4.8%	4.3%

 

Table data source: Statistica. 

Average historical mortgage rate in the UK

From 1995 until 2022, the average mortgage interest rate in the UK averaged 5.62%.

When were mortgage rates at their highest?

In the last 25 years, the average mortgage interest rate peaked at 8.87 per cent in September 1998.

When were mortgage rates at their lowest?

In the last 25 years, the average mortgage interest rate was at its lowest in September 2021, at which point it was 3.59 per cent.

Who is affected by mortgage interest rate increases and changes?

It’s important to be aware that in the short term changes in mortgage interest rates don’t impact current mortgage borrowers since the majority are on a fixed term mortgage.

In fact, around 75% of mortgage borrowers are on a fixed term mortgage and in 2019 over 90% of new mortgage borrowers opted for a fixed term mortgage.

A fixed-rate mortgage is a mortgage with a specific interest rate locked in for a certain duration e.g. 2, 4 or 10 years.

Therefore, the majority of people i.e. those on a fixed-rate mortgage will see no change in their mortgage payments in the short term.

What about those on variable-rate mortgages?

Those who are most vulnerable to changes to the interest rates are the over 850,000 individuals on a variable-rate mortgage.

In practical terms, UK Finance estimates that a rise in the Bank Rate of 0.15 percentage points will lead to an average increase in repayments by £15.45 per month.

What determines the mortgage interest rates?

Although your actual mortgage rate will be determined by factors like the product you choose and your particular lender, the Bank of England’s base rate also has a major impact to mortgage interest rates.

The base rate doesn’t just impact mortgages, but a wide range of financial products, as well as the value of the pound itself.

The Bank of England review the base rate on the first Thursday of every month and may be changed depending on the rate of spending in the economy.

For example, if spending is deemed to be too low, the base rate will be decreased and if it’s too high, it will be reduced.

Bank of England base rate 1979-2023

 

	Bank rate at year-end (%)*
1979	17
1980	14
1981	14.375
1982	10
1983	9.0625
1984	9.5
1985	11.375
1986	10.875
1987	8.375
1988	12.875
1989	14.875
1990	13.875
1991	10.375
1992	6.875
1993	5.375
1994	6.125
1995	6.375
1996	5.9375
1997	7.25
1998	6.25
1999	5.5
2000	6
2001	4
2002	4
2003	3.75
2004	4.75
2005	4.5
2006	5
2007	5.5
2008	2
2009	0.5
2010	0.5
2011	0.5
2012	0.5
2013	0.5
2014	0.5
2015	0.5
2016	0.25
2017	0.5
2018	0.75
2020	0.25
2020	0.10
2021	0.25
2022	0.5
2022	0.75
2023	5.0

 

Source: Bank of England Official Bank Rate History

What is the current mortgage interest rate?

As of June 2024, the Bank of England base rate stands at 5.25%.

According to Statista’s latest data, the average mortgage rate was 4.7% as of January 2024.

However, as mentioned this is an average and the exact rate offered to you will depend on a range of factors including your credit score, the mortgage lender, type of mortgage etc.

According to Trussle, at present, the average cost of two- and five-year fixed-rate deals across all deposit levels stands at 5.37% and 4.84% respectively.

Why are mortgage rates increasing?

The Bank of England increased the base rate to “cool” the economy and control surging inflation.

In October, the Consumer Prices Index (CPI) measure of inflation rose to a heady 11.1% in the 12 months to October, in direct conflict with government targets of 2% inflation.

Unfortunately, if inflation does not start to fall, the Bank of England could decide to continue to increase rates into the new year.

The cost of energy is another major contributor to surging inflation, but thanks to the UK government’s Energy Price Guarantee this has been tempered to a large degree.

Recommended guides: 

• Remortgage for home improvements.
• How long does mortgage approval take?
• Remortgage with bad credit.
• Remortgage for help to buy.

What does this mean for you?

With interest rates changing regularly, there is a lot of volatility in the market at present with mortgage deals being constantly updated to reflect the rapid pace of change.

With this in mind, it’s now unarguably more true than ever that you should contact a mortgage broker for help and advice.

A mortgage broker or advisor can hold your hand through the entire process, from initial searches to dealing with the legal stuff, to ensure the process is as smooth as possible.

Call us today on 03330 90 60 30 or contact us. One of our advisors can talk through all of your options with you.