Is it good news for mortgages with interest rates in the UK remaining unchanged?

The latest data on consumer inflation rate in the UK  as of August was at 6.3% according to the Office for National Statistics. The Bank of England (BOE) has kept interest rates unchanged standing at 5.25% and this is a surprise move, since November 2021 came as a direct result of the drop in inflation. 

While these rates are still way above the desired rates, the Bank of England has chosen not to raise interest rates. This came as a surprise to many including financial institutions as well as the general public. A stable interest rate after all could signify a slowdown in inflation levels. Which is a good sign for borrowers for property mortgages as well.

Borrowers on SVR and tracker mortgages will be having a close eye on these changing interest rates. As of now, no doubt it's a relief seeing stable interest rates, especially when it’s time for their monthly repayments. Fixed rate mortgage repayments are also seeing lower rates

compared to 6 months prior. The recent reduction by lenders on their lending rates, predicts even lower rates might be possible in the coming months.

The future of mortgages in the UK

Some compare financial borrowings to gambling. In some instances it may seem so too. Instability in the economy can mean all the difference between gains and losses. When it comes to borrowing, a buyer has the choice of choosing a low interest rate for short term mortgages and high rates as a longer term mortgage. With the current stabilisation of interest rates, it may seem like a better deal going in for a long term mortgage with a fixed rate. However there are concerns for borrowers who may wish to capitalise on lower interest rates in the short term. 

In the event of an interest rate drop, a fixed mortgage on a long term will not reap the optimal benefit and instead you may lose out by paying a higher interest rate. In this case, the wiser option would be to invest on a short term fixed rate mortgage or better still to take on a tracker mortgage that tracks interest rates of the Bank of England. Although still too early to say if the BoE interest rates will remain at the present rate or drop further, it will be interesting to observe what will unfold in the mortgage market throughout 20244.

Your investment for the future

The stabilisation of interest rates has indeed changed the playing field for borrowers. Mortgages are looking good compared to where they were 6 months prior. Locking in a fixed mortgage or even a tracker mortgage at the current interest rates can be a wise move you make for the future. But keep in mind that a tracker mortgage does run the risk of ending up with a higher repayment if the BoE rates do change for higher interest rates. As for fixed rate mortgages, you may even want to carry out an early settlement and go in for a new mortgage with a lower repayment if you are already paying a higher interest rate than what the BoE currently has. 

All these options are possible considering the current stabilisation of interest rates, getting a mortgage therefore at this point of time could turn out to be a profitable investment for the future. 


The slow but steady economic recovery in the UK is a clear indication by the stabilisation of the base interest rates set by the Bank of England. Economists are optimistic that the low rate will prevail and also have the possibility of dropping even further in the months that follow. 

With positive indications such as these, the mortgage market could be set for a rebound. If you are among those contemplating on getting a mortgage, this might be a good time to go for it. Considering the types of mortgages available, a fixed mortgage might be a safer option in case interest rates see a rise in the future. If you are keen on saving up with fluctuating rates, then a standard variable mortgage or a tracker mortgage would be ideally suited to meet your monthly gain, in the event of interest rates dropping even further.

Those who have already embarked on a mortgage, may have the opportunity to reschedule their mortgages with a lesser interest rate in place.  

Yes, times are looking to improve for mortgages. The UK is seeing a revival of its economy and investment opportunities are its path to a structured recovery. If you are thinking of a savings that brings in value for the future as well, you could be making the right decision by going in for a property mortgage at this period of time.

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


* Approved by The Openwork Partnership on 05/02/2024