Are the new mortgages rates in the UK here to stay?

The UK has been through a tumultuous time period following the pandemic and the economic fallout over the last couple of years. Its been anyone's guess as to how long this financial uncertainty will prevail and when there will be light at the end of the tunnel. Enduring this financial turmoil, the mortgage market has struggled to keep its head above water while trying to keep borrowers interested in purchasing property and at the same time trying to negotiate better and lower interest rates. In September this  year, the Bank of England stabilised interest rates for the first time since 2021 and in turn helped the mortgage market retain it’s interest rates  . 

So here’s the big question, will interest rates remain as they are or is it just a temporary fix before interest rates rise again?

How does base rate affect mortgages?

With the base rate stabilising at 5.25% (correct as of 01 December 2023), interest rates on mortgage lendings have seen a slow and steady drop, and hopefully will continue into the future as well. This downward trend spells out a good deal for fixed rate mortgages on 5 and 10 year terms. In addition tracker mortgages also could bring in good interest cuts, particularly in the short term. 

Although interest rates are still too high in comparison to what it was, mortgage industrialists are optimistic and look forward to a further drop in rates which ideally would be better than what it is currently, or match up to the 5% levels seen before the economic upsets. At present mortgage averages are around 6.02% for a two year fixed and 5.63% for a five year fixed, whereas Standard Variable Rates (SVR) averages are around 8.19% (as of 01 December 2023).

Is it a good time to get a mortgage?

With many borrowers struggling to meet their mortgage commitments, the high interest rates are obviously discouraging to borrowers. This slow down in activity in the housing and mortgaging market, is another perspective that lenders and banks are acutely aware of.

To meet these challenges, some mortgage lenders in the UK have cut down on their lending rates to encourage borrowers to continue their interests in investments. But this is not the case with all mortgage lenders. Some lenders have in fact been raising their lending rates.

Another factor that could determine if mortgage rates will remain the same or see a significant drop is the cost of energy. Cold seasons of Autumn and Winter could pose a very real reason for the mortgage rates to escalate. Energy is a costly commodity. Heating up homes and establishments during this time means additional cost. And this is obviously going to play a part on lender rates and the borrower’s return payments.   

Certain measures are in the process with lenders to provide better schemes to support borrowers who might be in difficulty when it comes to paying back their mortgage. One such measure is to allow up to a one year period of time to carry out the repayments before the home is repossessed. 

Going by these indicators of a stable base rate determined by the Bank of England, investing in a property at this period of time seems like a wise decision. However you may need to check with a qualified and experienced mortgage adviser before taking the ‘plunge’. BVS Mortgages and Financial Services can help you do just that. Speak to an adviser to gain insight on profitability before you decide on going ahead with a mortgage.


The road to economic recovery is never an easy one. However seeing the UK bounce back quickly is a definite sign of positive growth and encouragement for any business. Mortgages are good indicators to show the prosperity of a country. This is encouraging news which could mean even better or lower interest rates in the future. And for those keen on buying a property, this could be the best news in a long time. With many mortgage firms doing their best to provide access to competitive rates, investing in a property could be a profitable one. And hopefully interest rates will stay on for a sustained period of time and if at all, drop further in the future. Good times ahead for mortgages? It's looking very optimistic, let's hope for the best! 

This article is for guidance purposes only and does not constitute advice.


* Approved by the Openwork Partnership on 12/12/2023