mortgage costs interest rates

UK mortgages: is now the best time to lock in competitive rates?

As the number of available UK mortgages continues to rise, lenders are enticing borrowers with low interest rates. This can benefit those looking to remortgage or buy a property.

The number of UK mortgages has increased for nine consecutive months. This has led mortgage choice to reach its highest level in 16 months, according to data from Moneyfacts.

At the beginning of July, 4,512 mortgage deals were available. This is an additional 269 on the month prior. The increased competition can be found across different loan-to-values (LTVs).

Eleanor Williams of Moneyfacts says: “Over the past six months alone, availability has recovered by 1,619 – or 56% – and for the first time in over three years, we tracked improvements in choice across all the LTV brackets this month, great news for borrowers with all levels of equity or deposit.”

Low interest rates

With the increased competition, lenders are fighting to win more customers. This has caused some interest rates to hit rock bottoms. Borrowers can even benefit from the lowest ever rate seen for a two-year fixed-rate mortgage of 0.94%. There are a number of sub-1% deals available for borrowers with larger levels of equity or deposit.

From June to July, average rates decreased by 0.04% for both two-year and five-year fixed deals. However, the average rate for a two-year fixed deal was 2.49% in July 2019. And now the average has increased by 0.06% to 2.55%.

Additionally, first-time buyers and borrowers considering a mortgage at higher LTVs are also benefiting from recent rate cuts. For 90% LTV mortgages, the average two- and five-year fixed rates fell by 0.15% and 0.08% respectively. At 95% LTV, rates also decreased by 0.09% and 0.06% respectively.

The finance expert at Moneyfacts states: “Competition is evident across the residential mortgage sector, but there is no guarantee that rates will continue to fall, or for how long these record-low deals may be available for, therefore seeking advice to assess the best true cost deal for their own circumstances would be a wise move by any prospective borrower.”

Locking in competitive deals

While the average two-year fixed-rate deal is 0.06% higher than the rate from July 2019, the average five-year fixed-rate is currently 0.07% lower than two years prior.

Moneyfacts points out that this could show lenders are moving to price longer-term fixe rates more competitively. And this may also reflect a shift in borrower focus to locking in stable rates for longer, especially after these uncertain times.

These competitive deals for UK mortgages could allow some homebuyers and property investors to lock in particularly attractive mortgage rates. This could in turn allow them to make significant savings.

Eleanor Williams comments: “According to the latest Halifax House Price Index, there was a 0.5% drop in property prices, likely linked to the stamp duty holiday tapering off, but this in no way detracts from the fact that overall prices are up approximately 8.8% on a yearly basis.

“Demand for the very limited supply of property could remain high, as the appetite to either get onto the property ladder or for larger properties with home offices and outdoor space continues, and these borrowers could be enticed by the possible savings lower mortgage rates may bring them.”

Self-certified Sophisticated Investor

Please read

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of non-mainstream pooled investments. I understand that this means:

I am a self-certified sophisticated investor because at least one of the following applies:

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me seek advice from someone who specialises in advising on non-mainstream pooled investments.

High Net Worth Investor

Please read

I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-mainstream pooled investments. The exemption relates to certified high net worth investors and I declare that I qualify as such because at least one of the following applies to me:


Sign up for first access to new developments and exclusive property investment opportunities.

We send limited and targeted emails on new launches and exclusive deals which best fit your areas. We are trusted by over 30,000 active buyers as their source for new stock.

  • New property developments
  • Professional market reports
  • Property deal alerts
  • Development updates
Manchester property investment


Receive trending news straight to your inbox and stay up to date on all of the property market trends and advice.

Established since 2005 we are a leading voice of authority and commentary on the UK property market. Our news is trusted by Apple News & Google News.

  • UK housing market
  • Mortgage & money
  • Buy-to-let landlords
  • Guides & advice

Talk to us

Speak to our UK property experts today:


+44 (0) 333 123 0320

Open from 9am-6pm GMT


+852 6699 9008

Open from 9am-6pm HKT