Mortgage Rates 30 May 2024 (2024)

The Bank of England held its Bank Rate at 5.25% in May, as was widely expected. It’s the sixth time in a row the Rate has been frozen since it rose to its current level in August last year.

The Rate had previously undergone 14 consecutive rises (between December 2021, when it stood at just 0.1%, and last August). The next interest rate announcement will be on 20 June 2024.

The plateau in interest rate rises has been made possible by continued cooling inflation. The Office for National Statistics shows that inflation tumbled from 3.2% in March to 2.3% in April. As recently as last September, the figure was 6.7%.

Experts reckoned that continued falls in the rate at which prices are rising will prompt the Bank of England to cut its Bank Rate – which helps determine mortgage rates – possibly as soon as June when the next decision is announced by its Monetary Policy Committee (MPC), or in August at the following meeting.

The next inflation figure will be announced on 19 June with the latest Bank Rate figure coming out the following day. But the significant fall in April’s inflation rate has already prompted lenders to make cuts to mortgage costs.

Average cost of popular deals

But how much are borrowers paying right now? Rates vary according to lender and deposit size, but according to our mortgage partner Better.co.uk, the average cost of a two-year fixed rate mortgage, across all borrower types* today, stands at 5.20%. The average cost of three- and five-year deals is 4.99% and 4.76% respectively.

The leading two- and three year fixed rate deals today are priced at 4.69% and 4.49% respectively. The best five-year deal today is priced at 4.32%.

The average two-year tracker rate mortgage is priced at 5.68%, with the best in this category priced at 5.40%.

The typical standard variable rate (SVR) stand at 7.88% today, according to Better.co.uk. It compares to just 4.75% in July 2022. The SVR is usually what borrowers revert to once their deal, such as a fix or tracker, has expired.

In terms of mortgage availability, as of 1 May, there were 6,565 residential mortgage deals on the market according to data provider, Moneyfacts. The number has steadily risen from 6,307 (1 April), 6,004 (1 March) and 5,787 (1 February).

Below is a live table of the mortgage deals available today. You’ll find guidance on how to use the table underneath it.

How does Bank Rate affect mortgages?

When the Bank Rate rises or falls, it has an effect on the cost of mortgages.

There are more than a million homeowners (according trade body, UK Finance) on variable rate deals, such astrackers, whose payment will immediately either rise or fall if Bank Rate is adjusted.

If Bank Rate rose by 0.25 percentage points for example, a tracker deal priced at 5% would rise to 5.25%. This increase would add an extra £30 a month on a £200,000 loan taken over 25 years, with monthly repayments rising from £1,128 to £1,258.

Borrowers on fixed-rate deals, where the interest rate is locked are sheltered from changes to the Bank Rate. However, when their deal expires – as will be the case for around 1.6 million borrowers over the course of 2024 – new deals will be more expensive.

You can work out the monthly cost of a mortgage against various interest rates with our Mortgage Calculator.

What about house prices?

As it became clear we had reached the top of the interest rate cycle, signs for the housing market became largely positive. But recent data has reported a relatively flat market.

Halifax’s latest house price report (published 7 May) showed that average property values in April climbed by just 0.1%, having fallen by 0.9% in March. Annual growth in April grew to 1.1% compared to 0.4% last month. Halifax puts the cost of the average home in April at £288,781 compared to £288,430 in March.

Nationwide’s latest house price report (published 1 May) found that monthly prices fell by 0.4% in April (compared to a fall of 0.2% in March). The annual rate of change slowed to 0.6% from 1.6%. The lender cites ‘ongoing affordability pressures’ and the recent increase in longer term interest rates for the dip. It puts the cost of the average home in April at £261,962.

Rightmove, which measures asking prices, found that average values in May were 0.8% higher compared to April. Year-on-year, asking prices were 0.6% higher in May, which compares to an annual increase of 1.7% in April. Homes listed for sale on Rightmove are now priced at an average £375,131 compared to£372,324 last month.

Why did the interest rate rise cycle happen?

Interest rates underwent 14 consecutive rises between December 2021 and August 2023 as the Bank of England’s Monetary Policy Committee (MPC) used hikes to cool the economy and tame soaring inflation.

Annual inflation, as measured by the Consumer Prices Index (CPI), peaked at 11.1% in October 2022. By April 2024 it had fallen to 2.3%. However, this still higher than the Bank’s target of 2%.

One of the main drivers behind runaway inflation had been the cost of energy bills. Energy regulator Ofgem’s energy price cap was as high as £4,279 in the first quarter of 2023 (although government intervention had applied a temporary ceiling of £2,500).

The current cap (effective from 1 April 2024) stands at £1,690 and is 12% lower than the previous £1,928 which applied between 1 January and 31 March 2024. It has now been confirmed by Ofgem that the cap will fall by a further 7% from 1 July to £1,568, where it will remain for the next three months until 1 September.

The energy price cap is the quarterly figure that represents the annual bill of a typical household paying monthly by direct debit (although actual bills are always determined by consumption).

What mortgage deals are available?

Keeping track of mortgage costs can challenging – especially when rates can change on a daily basis. One simple way is use our mortgage tables, powered by Better.co.uk.

To find out what deals are available at today’s rates for the kind of mortgage you’re after, enter your personal criteria into our mortgage table (above). Here’s what to do:

• Select whether the mortgage is to fund a house purchase or if it’s a remortgage for an existing property

• Enter the property value and the mortgage amount you require. This will automatically generate a percentage which is known as your ‘loan to value’. The lower your loan to value, the cheaper the mortgage rates available

• Tick the relevant box if it’s a buy-to-let or interest-only mortgage (you’ll need a repayment strategy in place for these deals), or if you’re looking for a mortgage to fund a shared ownership property

• Finally, filter your search by the type of mortgage you want, for example a two- or five-year fix or tracker. The filter is set to a complete mortgage term of 25 years but you can change this if required.

What else do I need to know?

Mortgage deals offering the cheapest rates usually come with fees attached. You can opt to pay these upfront or add them to the loan. To factor in the cost of the fee, order your the results by ‘initial period cost’ (in the ‘sorted by’ dropdown).

Alternatively, you can order results by initial rate, lowest fee or monthly repayment – even by the lender’s ‘follow on’ rate that the deal will revert to at the end of the term.

The very cheapest are reserved for bigger deposit amounts, usually of 60% of the property value or more. And, in all cases, you will need a sufficient income and clean credit history to be accepted for a mortgage.

If you want to see what your monthly mortgage payments might look like in different scenarios while overlaid with household bills, our Mortgage Calculator will crunch the numbers.

When can I start a remortgage?

Once issued, mortgage offers tend to be valid for six months, although some lenders honour offers for up to 12 months. If you are looking to remortgage your current home, this means you can lock in a rate today – at no cost and with no strings attached.

How are average mortgage costs calculated?

*Average mortgage costs can vary between sources depending on how the data is gathered. Better.co.uk’s data refers to the average cost of a fixed rate mortgage recommendation that is created and issued to applicants over the last seven days from its panel of over 100 lenders.

The data counts remortgage and purchase loans but excludes SVRs, adverse credit, self-build and shared ownership. Data is collected at the end of each business day.

Better.co.uk targets applicants with a good credit history. Lower loan-to-values (under 85%) account for a significant portion of its business which can translate into cheaper loan rates.

Its average fixed rate costs may therefore appear lower than some others quoted on the market.