Low Mortgage Rates in the UK

Along with the others, the 5-year fixed home loan interest rate went down from a high of 6.92% in 2008 (the highest) to 4.99% today. The average two-year rate fell from 5.18% to 4.74% today. The 3-year rate declined from a high of 5.61% to 4.74%.

From the leading lending institutions, the standard rates at present is from a low of 3.15% to a high of 5.19%. (The initial rates also vary from 1.9% to 3.35%). The average duration is two years. The maximum loan-to-value is pegged at a low of 60%, the mid-range of 75% and a high of 80%.


There are other indicators that could have been triggered by the current low mortgage rates in the UK. Per CML (Council of Mortgage Lenders), there is also an increase (22%) in the home loans advanced for house purchases for May alone, with about a quarter composed of first-time buyers.

House repossession had been reduced to only 7% on the first half of this year compared to last year’s figures in the same period. In the past, fixed-rate mortgages were traditionally more expensive compared to tracker and standard variable rates. Today, it is at par with variable rates.


First-time buyers are now in a better financial position to buy their own homes given the lower interest payments. New mortgage deals are offered in the market by vigorously competing lenders, which can drive further down some extraneous fees.

For present mortgage holders, the drop in rates means some easing up on their monthly obligations and shifting the saved-up part to other uses. Reduced mortgage rates in the UK might just be the beginning of better things to come.

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