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Mortgages
Compare today's lowest mortgage rates from across the whole market and find the right deal for your circumstances.
The best mortgage rates in the UK currently start from around 3.47% for a two-year fixed deal at 60% loan-to-value, based on data from Moneyfacts and Rightmove. Five-year fixed rates begin from 3.74% at the same LTV tier.
The Bank of England base rate stands at 3.75% following a cut in December 2025, with further reductions expected through 2026. Competition among lenders including HSBC, Halifax, Nationwide, NatWest, and Barclays has pushed rates to their lowest levels since 2022, with over 7,158 mortgage products now available.
Your actual rate depends on your loan-to-value ratio, credit score, income, and property type. Someone with a 40% deposit could save over £200 per month compared to accepting an average offer. Tracker mortgages currently start from base rate plus 0.60%, while standard variable rates average 7.27%. Comparing deals across the whole market is the most effective way to find the lowest rate for your circumstances.
Sources: Moneyfacts, Rightmove, Bank of England (January 2026)
UK mortgage rates have been falling steadily, with the best two-year fixed deals now starting from 3.47% and five-year fixes from 3.74%. Intense competition among lenders has resulted in the best available rates reaching their lowest point since 2022.
The rates you see depend heavily on your deposit size, expressed as a loan-to-value (LTV) ratio. Borrowers with a 40% deposit access the lowest rates, while those with smaller deposits pay more. Standard variable rates (SVRs) remain high at an average of 7.27%, making it important to compare fixed deals before your current rate expires.
The gap between the best rates and average rates shows why comparing mortgages matters. Someone with a 40% deposit could save over £200 per month by finding the best deal rather than accepting an average offer.
Mortgage rates have been on a downward trend since late 2025, and this looks set to continue through 2026. Several key factors are driving the market.
The Bank of England cut the base rate to 3.75% in December 2025: the fourth reduction since the August 2023 peak of 5.25%. According to Capital Economics and ING forecasts, the base rate could fall to between 3.0% and 3.25% by the end of 2026 if inflation continues to ease.
If you are on a tracker mortgage, your payments move directly with the base rate. A 0.25% cut on a £200,000 mortgage would reduce your monthly payment by around £25 to £30.
Fixed-rate mortgages do not change with base rate announcements, but lenders adjust their pricing based on where they expect rates to go. That is why fixed rates often move before the Bank of England makes changes.
Lenders including HSBC, Halifax, Nationwide, NatWest, and Barclays all cut rates in January 2026, competing for business. Product choice has risen to 7,158 options: the highest since October 2007. This competition benefits borrowers. If you are coming to the end of a fixed deal or buying a home, now could be a good time to lock in a rate.
Your loan-to-value (LTV) ratio is one of the biggest factors affecting your mortgage rate. LTV measures how much you are borrowing compared to your property's value.
How to calculate LTV: LTV = (Mortgage amount / Property value) x 100. For example, if you are buying a £300,000 home with a £60,000 deposit, your mortgage would be £240,000 and your LTV would be 80%.
Lenders see lower LTV borrowers as less risky. If house prices fall, there is more equity protecting their loan. That is why someone with a 40% deposit typically gets rates 0.5% to 1% lower than someone with a 10% deposit.
Rate types
If you are buying your first home, you will typically face slightly higher rates than someone remortgaging with significant equity. That said, competition for first-time buyer business is fierce, and many lenders offer competitive deals.
Monthly mortgage costs for first-time buyers (as a share of income) are now at their lowest level since 2022, according to Tembo. Wage growth combined with falling rates has improved affordability, though saving for a deposit remains challenging in high-cost areas.
The mortgage guarantee scheme encouraged lenders to offer 95% LTV mortgages more widely. While the original government scheme has ended, many lenders now offer small-deposit mortgages on their own terms. Some lenders also offer family assist or springboard mortgages where parents can use their savings as security.
If your current deal is ending, remortgaging could save you thousands. Around 1.8 million fixed-rate mortgages are due to expire in 2026, according to UK Finance.
You can typically lock in a new rate up to six months before your current deal ends. Given the competitive market, this is worth doing. You can secure today's rate while keeping the option to switch if better deals appear.
If you have rolled onto your lender's standard variable rate (averaging 7.27%), switching to a fixed deal could save significantly. On a £250,000 mortgage over 25 years, moving from an SVR at 7.27% to a two-year fix at 4.28% saves £488 per month, or £5,856 per year.
Mortgages
Speak to a specialist mortgage advisor who can search across the whole market to find the right deal for your circumstances.
Buy-to-let mortgages typically carry rates 0.5% to 1% higher than residential mortgages because lenders see rental properties as higher risk.
Note that buy-to-let rates often come with high percentage fees that can significantly increase the true cost. A 2.20% rate with a 7% fee on a £200,000 mortgage means paying £14,000 in fees upfront.
Most buy-to-let lenders use rental coverage rules. Your expected rent must typically cover 125% to 145% of the mortgage payment at a higher stress test rate. This means your maximum borrowing often depends more on achievable rent than your personal income.
According to Moneyfacts, the average two-year fixed buy-to-let rate is 4.70%, with the average five-year fixed at 4.85%. These are down from over 6% a year ago.
While headline rates make good news stories, the rate you are actually offered depends on several personal factors.
LTV makes a significant difference. Every 5% extra deposit typically means a better rate tier.
Lenders check your credit history with agencies like Experian, Equifax, and TransUnion. A strong credit score (typically 700+ on most scales) opens access to the best rates. Issues like missed payments, poor credit, or high existing borrowing can mean higher rates or declined applications.
Before applying, check your credit report for errors, pay down credit card balances if possible, and avoid applying for new credit in the months before your mortgage application.
Lenders assess affordability by looking at your income minus committed spending. They want to know you can still afford payments if rates rise. Self-employed borrowers typically need two to three years of accounts or tax returns.
Non-standard construction (thatched roof, timber frame, concrete), short leases (under 70 years remaining), or properties above commercial premises can limit your options and increase rates.
Rates vary based on whether you choose fixed or tracker, the length of the deal, the fee structure (higher fees often mean lower rates), overpayment flexibility, and early repayment charges.
This is one of the biggest decisions when choosing a mortgage. Here is how to think about it.
The trade-off is that you will not benefit if rates fall significantly below your fixed rate. Leaving early means paying an early repayment charge, usually 1% to 5% of the balance.
The trade-off is uncertainty. If the Bank of England raises rates (or cuts less than expected), your payments increase.
The best five-year fixed rates are around 3.76%, while the best five-year tracker is base rate plus 0.60% (currently 4.35%). For fixed to come out ahead, the base rate would need to stay above 3.16% on average over the next five years. Most forecasts suggest the base rate will settle between 3.0% and 3.25% by the end of 2026.
The headline rate is not the whole story. Fees can add thousands to your mortgage cost.
A lower rate with a £1,500 fee is not always better than a slightly higher rate with no fee. For example, on a £200,000 mortgage over two years: a 3.64% rate with a £1,499 fee costs £10,427 total (£8,928 interest plus £1,499 fee), while a 3.94% rate with no fee costs £9,720 total. The higher rate actually costs less overall.
Most lenders let you add arrangement fees to your mortgage balance. This means you pay interest on the fee for your entire mortgage term. A £1,500 fee added to a 25-year mortgage at 4.5% would actually cost around £2,600 in total. Always calculate the true cost, not just the headline rate.
How it works
Know your numbers
Work out your property value, deposit or equity amount, LTV percentage, and budget for monthly payments. These figures determine which rate tiers and products you can access.
Compare the true cost
For each mortgage, calculate total interest over the deal period plus all fees including arrangement, valuation, and legal costs. The true cost is interest plus fees, not just the headline rate.
Consider your plans
Think about how long you will stay in the property, whether you might need to move within the deal period, and if your income might change. A two-year fix suits uncertain plans, while a five-year fix offers longer certainty.
Get expert help
Mortgage brokers search across the whole market and can often access deals not available directly. Many work on a fee-free basis, paid by the lender when your mortgage completes.
While no one can guarantee where rates will go, here is what forecasters expect.
Most economists expect the Bank of England to cut rates one to two more times in 2026:
Fixed mortgage rates already price in expected base rate cuts, which is why five-year fixes are often similar to or lower than two-year fixes. If cuts happen as expected, fixed rates may not fall much further.
However, tracker rates would reduce directly with each cut. A base rate of 3.25% (down from 3.75%) would reduce a base-plus-0.60% tracker from 4.35% to 3.85%.
Lock in now if your current deal is ending soon, you are on an expensive SVR, or you value certainty over potential savings. Consider waiting if you are mid-way through a competitive deal, can absorb rate uncertainty, or are on a penalty-free tracker. You can often lock in a rate six months ahead while keeping the option to switch if better deals appear.
A good mortgage rate depends on your circumstances. Rates around 3.5% to 4% are excellent for borrowers with a 40% deposit or more. Those with a 25% deposit should target 4% to 4.5%. First-time buyers with 5% to 10% deposits can expect rates between 4.5% and 5%.
Most forecasters expect mortgage rates to fall gradually through 2026, supported by Bank of England base rate cuts. However, much of the expected decline is already reflected in current fixed rates. Dramatic drops are unlikely unless inflation falls faster than expected. Tracker rates would reduce directly with each base rate cut.
The best mortgage rates are typically available at 60% loan-to-value, meaning a 40% deposit. Each 5% extra deposit generally unlocks better rate tiers. You can get a mortgage with just a 5% deposit, but you will pay higher rates. The difference between 60% and 95% LTV can be over £80 per month.
This depends on your plans and risk tolerance. A two-year fix gives flexibility to switch sooner if rates fall or your circumstances change. A five-year fix offers longer payment certainty. Currently, average five-year fixes at 4.38% are slightly higher than two-year fixes at 4.28%, reflecting some expectation that rates may fall.
When your fixed deal expires, you automatically move onto your lender's standard variable rate, typically around 7.27%. This is much higher than most fixed deals, so remortgaging before your deal ends is worth doing. You can usually start the remortgage process up to six months before your current deal expires.
Yes, though your options will be more limited and rates higher. Specialist lenders consider applicants with past credit issues including missed payments and defaults. The key factors are how recent the issues were, whether they are now resolved, and your overall financial stability. A specialist broker can help find suitable lenders.
You do not need a broker, but they can help you find deals across the whole market, including some only available through intermediaries. Many brokers work fee-free, earning commission from lenders instead. They also handle the paperwork and chase the application on your behalf, saving time and effort.
Yes, but you will typically pay an early repayment charge if you are still within your fixed or tracker deal period. These charges are usually 1% to 5% of your outstanding balance. Sometimes the savings from a better rate outweigh the charge, especially if you are close to your deal ending.
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