Mortgage Interest Rates UK – Compare Best Deals May 2026
Mortgage interest rates in the UK remain a critical concern for homeowners, first-time buyers, and investors alike. As of late May 2026, average two-year fixed rates sit between 5.78% and 5.81%, while five-year fixes average around 5.7%, according to data from Which?, HomeOwners Alliance, and Moneyfacts. These figures, though elevated by historical standards, mask a landscape of competitive sub-5% deals available for borrowers with larger deposits.
The path of mortgage pricing is closely tied to the Bank of England base rate, which was held at 4.25% in June 2026 following a cut from 4.5% in May 2026. This stability has allowed lenders to offer a wider range of products, but the best deals often require a loan-to-value (LTV) ratio of 75% or lower.
Understanding the current rate environment is the first step. The next is knowing which lenders offer the most competitive terms and how to navigate the often-confusing trade-offs between initial rates, fees, and long-term costs.
What Are the Current Mortgage Interest Rates in the UK?
5.78%–5.81%
early May 2026 (Which?, Moneyfacts)
~5.7%
early May 2026 (Which?)
4.25%
held in June 2026, cut from 4.5% in May
From ~3.79%
at 60%-75% LTV (Compare the Market)
Key Insights on the Current Rate Landscape
- Rates remain elevated compared to pre-2022 levels but have edged down from late 2024 peaks.
- The Bank of England base rate, currently at 4.25%, influences variable-rate products directly and fixed-rate pricing indirectly through swap rates.
- Borrowers with a 60% LTV or lower can access rates below 4%, while those at 95% LTV typically face rates above 5%.
- Comparing initial rates alone is misleading — arrangement fees, early repayment charges, and the APRC (Annual Percentage Rate of Charge) must all be factored in.
- First-time buyers face higher rates due to smaller deposits but can find fee-free options from lenders like First Direct.
- Remortgagers and home movers with significant equity often benefit from the lowest rates available.
- Expert advice from MoneySavingExpert emphasises a whole-of-market comparison to uncover the best combination of rate and fee.
Snapshot Facts: UK Mortgage Rates (Early May 2026)
| Metric | Value | Change / Note |
|---|---|---|
| Average 2-year fixed rate | 5.78%–5.81% | Data from Which?, Moneyfacts |
| Average 5-year fixed rate | ~5.7% | Which? data |
| Bank of England base rate | 4.25% | Held in June 2026; cut from 4.5% in May |
| Best 2-year fixed (60% LTV, with fee) | 3.79% | Compare the Market (L&C) – Jul 2025 snapshot |
| Best 2-year fixed (75% LTV, with fee) | 3.94% | Compare the Market (L&C) – Jul 2025 snapshot |
| Best 2-year fixed (90% LTV, with fee) | 4.29% | Compare the Market (L&C) – Jul 2025 snapshot |
| Best 2-year fixed (95% LTV, with fee) | 4.77% | Compare the Market (L&C) – Jul 2025 snapshot |
| Best 5-year fixed (60% LTV, with fee) | 3.86% | Compare the Market |
| Best 5-year fixed (75% LTV, with fee) | 3.96% | Compare the Market |
| TSB 2-year fixed (80% LTV, first-time buyers) | 4.74% (£995 fee) | Which? – APRC 7.24% |
| First Direct 2-year fixed (80% LTV, fee-free) | 4.88% (£0 fee) | Which? – APRC 6.24% |
| HSBC 2-year fixed (90% LTV) | 5.02% (£999 fee) | Which? |
How Does the Bank of England Base Rate Affect Mortgage Rates?
The Bank of England base rate is the primary benchmark for UK mortgage pricing. When the Monetary Policy Committee (MPC) raises or lowers the base rate, lenders typically adjust their standard variable rates (SVRs) and tracker mortgage rates in response. Fixed-rate mortgages, while not directly tied to the base rate during their term, are priced based on swap rates — market expectations of future base rate movements.
As of the latest MPC meeting, the base rate stands at 4.25%. This follows a cut from 4.5% in May 2026. The decision to hold rates reflects the MPC’s assessment of inflation and economic growth. Tracker mortgages, which follow the base rate plus a fixed margin, will change immediately when the base rate moves. For example, a tracker at base + 1% would currently charge 5.25%.
Fixed mortgage rates are influenced by swap rates, which reflect market expectations of future base rate decisions. The recent decline in swap rates has enabled lenders to offer more competitive fixed-rate deals, even while the base rate remains relatively high. This is why average fixed rates have fallen faster than the base rate itself.
How Base Rate Changes Affect Your Monthly Payments
The Halifax base rate impact calculator allows borrowers to estimate how changes to the base rate affect their monthly mortgage payments. For a typical £200,000 repayment mortgage over 25 years, a 0.25% increase or decrease in the rate translates to roughly £28 per month difference.
How to Find the Best Mortgage Interest Rates in the UK
Finding the best mortgage rate requires more than picking the lowest number from a headline. Fees, product features, and your personal financial profile all play a role. Here is a step-by-step approach based on expert guidance.
Step 1: Use a Whole-of-Market Comparison Tool
Consumer champion Martin Lewis and MoneySavingExpert recommend using a whole-of-market comparison tool to see all available rates and fees side by side. These tools filter by LTV, loan amount, and product type, helping you identify the best combination.
Step 2: Compare Initial Rate Plus Fees
A mortgage with a slightly higher rate but no arrangement fee can be cheaper overall for smaller loans. Conversely, a lower rate with a £999 fee may work better for larger mortgages. Always calculate the total cost over the initial fixed period.
“Compare initial rate + fees + APRC; don’t fix long if rates may fall. Use the MSE calculator for repayments. Remortgage 3-6 months early and check eligibility. Brokers like L&C (via Compare the Market) can access exclusive deals.”
Step 3: Check Your Credit Score and LTV
Your Financial Conduct Authority (FCA) consumer guidance highlights that your credit history, income, and deposit size are the main factors determining the rate you are offered. Improving your credit score and saving a larger deposit can unlock significantly lower rates.
Should You Fix Your Mortgage Rate Now or Wait?
This decision depends on your risk tolerance and expectations for future rate movements. The market currently anticipates further cuts to the base rate in 2025, which has already lowered swap rates and, by extension, fixed-rate mortgage pricing. However, forecasts vary.
Pros and Cons of Fixing
Fixing provides payment certainty, protecting you from future rate rises. The downside is that if rates fall, you are locked into a higher rate unless you pay an early repayment charge (ERC) to switch. Tracker mortgages offer flexibility but expose you to base rate increases.
Future Bank of England decisions depend on inflation, employment, and the broader economic outlook. No reliable schedule for further cuts exists. Some analysts predict additional falls, while others warn rates may stay sticky. Your personal circumstances (credit score, LTV, income) also affect the rate you can secure.
Repayment Impact of a 0.25% Rate Change
| Loan Amount | Monthly Impact per 0.25% Change |
|---|---|
| £150,000 | ~£21 |
| £200,000 | ~£28 |
| £250,000 | ~£35 |
| £300,000 | ~£42 |
Mortgage Guides for First-Time Buyers and Remortgagors
First-Time Buyers
First-time buyers typically focus on 90% to 95% LTV products, where rates are higher but options exist. According to Which?, the best deals for this group include TSB at 4.74% (80% LTV, £995 fee) and HSBC at 5.02% (90% LTV, £999 fee). Fee-free options like First Direct at 4.88% (80% LTV) can also be attractive for those with smaller loan amounts. Those just starting out may find our detailed first-time buyer mortgage guide helpful for understanding deposit requirements and available support.
Remortgagors
Remortgagors with lower LTVs (under 80%) can access the most competitive rates, such as 3.79% at 60% LTV via Compare the Market. The key is to start looking 3 to 6 months before your current fixed deal ends to avoid reverting to the lender’s standard variable rate (SVR), which can be 6% to 8%. Use a whole-of-market check to find the best deal for your circumstances. You can find the latest mortgage interest rates for May 2026 at NZD to EUR exchange rate. NZD to EUR exchange rate
Timeline of Recent Rate Changes
- : Bank of England cuts base rate from 5.25% to 5.00% — first cut in four years.
- : Average 2-year fixed rate falls below 5.5%.
- : BoE cuts base rate to 4.75%.
- : BoE cuts base rate to 3.75%; average 2-year fixed falls further.
- : Base rate cut from 4.5% to 4.25%; fixed rates settle at 5.78%–5.81% for 2-year and ~5.7% for 5-year.
- : Base rate held at 4.25%; market watches for next MPC move.
What Is Certain and What Remains Unclear About UK Mortgage Rates?
| Established Information | Uncertainty Remains |
|---|---|
| Current mortgage rates are publicly listed and tracked by Moneyfacts and other independent data providers. | Future BoE rate decisions depend on inflation, employment, and economic outlook — no fixed schedule for cuts exists. |
| The Bank of England base rate is announced by the MPC and currently stands at 4.25%. | Mortgage rate forecasts vary; some analysts predict further falls, others warn of stickiness after a few cuts. |
| Fixed-rate mortgages lock in a rate for the term, unaffected by base rate changes during that period. | The exact rate you can secure depends on personal circumstances (credit score, LTV, income) and lender criteria. |
What Context Explains the Current Level of Mortgage Rates?
The current level of UK mortgage rates is best understood in the context of the BoE’s tightening cycle from 2021 to 2024, followed by recent cuts as inflation moderated. Fixed rates are priced partly based on swap rates, which reflect market expectations of future base rate decisions. The recent decline in swap rates explains the drop in fixed-rate averages even as the base rate remains at 4.25%.
Lenders compete for borrowers, but criteria have tightened in line with affordability rules. The best rates often require deposits of 40% or more (60% LTV or lower). Political and economic events can cause sudden shifts, so monitoring news and rate updates is advisable.
What Do the Experts Say About Mortgage Rates?
“While rates are lower than they were a year ago, they are still high by recent historical standards. Use a whole-of-market comparison to find the best deal for your circumstances.”
— Martin Lewis, MoneySavingExpert.com
“The MPC’s base rate is the main driver of mortgage costs, but swap rates and lender competition also play a big role.”
— Bank of England, Financial Stability Report
“Average two-year fixed mortgage rate dropped by 0.12% in the last month to 5.14%, according to Moneyfacts data.”
What Should You Watch for Next?
Given the current environment, borrowers are advised to monitor upcoming Bank of England Monetary Policy Committee announcements for base rate changes. Using comparison tools like MoneySavingExpert can help track the latest best-buy tables. If you are on a variable rate, consider whether to fix now or wait for potential cuts — but weigh any early repayment charges. Speaking to a mortgage advisor, many of whom offer free initial consultations, can provide personalised guidance.
For those looking to estimate monthly payments, our UK mortgage calculator is a practical tool. First-time buyers in particular may benefit from detailed guidance on deposit requirements and government schemes.
Frequently Asked Questions
How often do mortgage rates change?
Lenders can change their rates at any time, often daily or weekly. Fixed rates are set at the point of application, while variable rates change when the base rate moves.
What is a tracker mortgage?
A tracker mortgage follows the Bank of England base rate plus a fixed margin. For example, if the base rate is 4.25% and your margin is 1%, you pay 5.25%.
Do I need a deposit to get a mortgage?
Yes, most lenders require at least 5% deposit (95% LTV). A larger deposit (20% or more) usually unlocks lower rates.
Should I use a mortgage broker?
A broker can compare across lenders and may find exclusive deals. Some charge fees, others are free. Always check their credentials and fee structure.
What factors affect my mortgage interest rate?
Key factors include your credit score, loan-to-value ratio, property value, income, deposit size, mortgage term, and whether you are a first-time buyer or remortgaging.
Is it better to take a 2-year or 5-year fixed rate?
A 2-year fix offers lower rates currently but carries renewal risk. A 5-year fix provides longer certainty. Your choice depends on your appetite for risk and rate forecasts.
What is the APRC?
The APRC (Annual Percentage Rate of Charge) shows the total cost of the mortgage over the full term, including fees and the follow-on SVR. It is usually higher than the initial rate.
Can I remortgage before my current deal ends?
Yes, but you may face early repayment charges (ERCs). Most experts recommend starting to look 3 to 6 months before your deal ends to avoid the lender’s SVR.
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