Best mortgage rates – August 2024

Finally! The Bank of England has cut interest rates for the first time since March 2020. The best Mortgage Rates continue to nudge down this month as mortgage lenders start to reduce rates on fixed deals. And with this trend set to continue in the coming weeks it’s vital to seek out the best mortgage rates in the UK. Read on for the best mortgage rates currently available, best remortgaging deals, best 5 year fixed rate, Buy To Let mortgage deals, green mortgage deals and more.

Finding the best mortgage rates in a sea of mortgage deals is hard work. So every month we’ll be showcasing the best mortgage deals for you, with input from the mortgage experts at L&C.

Best mortgage rates August 2024

The best mortgage rates on fixed deals in August continue to drop after lenders including HSBC, NatWest and Barclays have reduced their rates. More lenders will follow suit as they react to the Bank of England’s decision to cut interest rates from 5.25% to 5.00%.

But these reductions are small in the wider context. As we face significantly higher mortgage rates than the ultra-low ones we’ve seen in recent years, Bank of England figures show around 3 million households are set for a ‘mortgage shock’ and will see their mortgage payments rise significantly in the next two years. Around a third of people with a fixed-rate mortgage are paying less than 3%, after locking in when interest rates were lower.

So the key message is: it’s even more important than ever to shop around for the best mortgage deal before your current mortgage deal ends. And act fast when you find the deal you want to avoid the risk of missing out. If your current mortgage deal expires in the next 6 months, you can apply for a mortgage now to lock in a rate then keep it under review with L&C’s Rate Check service to make sure you don’t miss out on a better mortgage rate before you need to switch.

It also means you’ll avoid your current deal rolling onto your lender’s Standard Variable Rate which are averaging 8.18% but some are much higher. For example Aldermore’s SVR is currently a staggering 9.73%.

If you’re a first time buyer, the chances are you’ll want to look for mortgage products better suited to you. Read our Best first time buyers mortgage rates guide – we bring you the best current mortgage rates in the UK whatever your deposit size, from 0% to 40%.

Best 2 year fixed rate mortgage

• Barclays 4.42%. Scheme fees: £899. Max LTV 60%. Purchases only.
• NatWest 4.54%. Scheme fees: £1,544. Max LTV 60%. Remortgages only.

The best mortgage rates on 2 year fixed rate mortgages are down this month. Last month, the best rate for purchases was from Halifax but at 4.6%. While the best rate for remortgages last month was 4.75% from NatWest.

Best 3 year fixed rate mortgage

• MPowered Mortgages. 4.39%. Scheme fees: £999. Max LTV 60%. Available for purchase.
• MPowered Mortgages 4.45%. Scheme fees: £999. Max LTV 60%. Available for remortgage.

With 3 year fixed rate mortgages as this month’s best mortgage rates are a fraction lower than last month, when MPowered Mortgages offered 4.48% for remortgages and 4.45% for purchases.

Best 5 year fixed rate mortgage

• NatWest 4.03% Scheme fees: £1,495. Max LTV 60%. For purchases.
• NatWest 4.24% Scheme fees: £1,544 Max LTV 60%. For remortgages

The best rate on a 5 year fixed rate mortgage continues to drop this month for purchases compared to last month when the best rate on offer was from Santander but at 4.2%. NatWest continues to offer the best remortgage rate for a 5 year fix this month but they have dropped it from 4.36% last month.

Best 10 year fixed rate mortgage

• First Direct 4.64%. Scheme fees £490. Max LTV 60%. Purchases only
• First Direct 4.78%. Scheme fees: £490. Max LTV 60%. For remortgages

Although the best rates on 10 year fixed rate mortgages are the same as last month for remortgages and purchases, the maximum LTV for purchase has dropped from 75% to 60%.

Best variable rate mortgages

• Newbury Building Society 4.89% (2.11% discount for 3 years). Scheme fees: £0. Max LTV 75%.

If you’re looking for the best mortgage rates on a variable rate mortgage, the best rate this month is the same as last month. Although you will be saving on fees as they were £850 last month. You must remember that the rate you pay on variable rate deals can go up or down, unlike fixed rate mortgages.

Best Buy to Let mortgages rates

• Fixed: The Mortgage Works 3.54% 2 year fix. Max LTV 65%. Scheme fees £4,090.
• Variable: Monmouthshire Building Society 3.49% discount for 2 years at 5%. Max LTV 75%. Scheme fees £2,910.

With Buy to Let mortgage rates, the best rate on a fixed rate mortgage is down this month; last month the best rate was offered by The Mortgage Works at 3.69%. While the best rate for a variable rate deal is the same as last month.

For more information on your options in the face of rising interest rates, read our guide on the Best Buy to Let mortgage rates, Buy to Let mortgages explained and Remortgaging your Buy to Let.

Best Green Mortgage rates

Looking at Green mortgages? NatWest offers a 2 year fixed rate mortgage at 4.54% and is available for remortgages up to 60% LTV.

It has a £995 arrangement fee, free valuation and free basic legal work. NatWest green mortgages are available on properties with an Energy Performance Certificate (EPC) Rating of A or B.

Are you looking to remortgage?

These may be the best UK mortgage rates currently available but no one knows how long these best mortgage rates will be available for. So act now. And if you’ve already started the remortgage process, make sure you’re getting the best mortgage deal available. The easiest way to do this is to use L&C’s Rate Check service or by speaking directly to a fee-free broker who has the expertise to search the market for you to find the best fixed mortgage rates and best variable rate mortgages too.

The best mortgage rates are changing fast. For the latest deals and fee-free mortgage advice speak to our partners at L&C. Start online or give them a call today about your mortgage needs

When will UK mortgage rates come down?

It’s very difficult to make an accurate mortgage rate forecast as this will depend on numerous factors. Although the Bank of England has made its first cut in interest rates cut in August, there is no guarantee that this will continue, especially as core inflation remains high. As a general rule: if interest rates fall, the mortgage rate forecast would be for mortgage rates to fall too. But time will tell if this happens.

What’s happening with average mortgage interest rates?

On 24 July 2024, the average 2 year fixed mortgage rate at 60% LTV was 4.74%, while the average 5 year fixed mortgage rate at 60% LTV was 4.21%, according to figures from Rightmove.

How much is the average standard variable rate?

The average standard variable rate in June 2024 was 8.18%. The standard variable rate is the default rate you’ll roll onto when your mortgage deal ends. But SVRs vary widely by lender. For example Newcastle Building Society’s SVR is currently 6.94% while Aldermore’s SVR is 9.73%. Read more in our guide Should you ditch your Standard Variable Rate mortgage?

So while the best mortgage rates on offer this month may seem high compared to what has been available in recent years, your lender’s Standard Variable Rate (SVR) could be significantly higher.

Looking for the cheapest mortgage rates? Speak to fee-free brokers L&C — start the process online or speak to an advisor today.

How to find the best mortgage deal

If your current mortgage deal ends in the next six months you should act now to find the best mortgage deal because the best mortgage rates could disappear quickly.

When it comes to finding the best mortgage rates this month, here’s our advice:

• Whether you’re remortgaging or buying a house, don’t just go to your bank for your mortgage. It’s more important than ever to shop around for the best mortgage rates. Speaking to a fee-free mortgage broker is the quickest and easiest way to find the lowest mortgage rates.
• Beware of hanging on expecting better mortgage rates: The reality is even the best mortgage rates are significantly higher than we have been used to in recent years. Noone knows whether the best mortgage rates will increase or drop in the next few months. But if you secure a remortgage deal several months in advance you’ll have that in the bag while keeping your eye out for other offers before your remortgage date. Speak to a fee-free broker today to explore your options.
• However, if you’re on your lender’s standard variable rate, check your deal now to see if you can save by remortgaging as average mortgage interest rates on SVRs have soared over the last 18 months.

How to check if you’re on the best mortgage rate

The easiest way to do this is to use L&C’s Rate Check service. Plus, L&C are fee-free, unlike many brokers which charge fees that can amount to thousands of pounds. So you may save even more.

When you’re considering your remortgage options, while the mortgage rates is obviously a key factor, when you’re looking at the best mortgage rates remember to look at the whole picture including fees. But don’t worry, a fee-free mortgage broker will do the calculations for you to find the best mortgage deals available.

If the base rate increases, how does it affect my mortgage?

This depends on what type of mortgage you have. If you’re on a tracker mortgage, an increase to the base rate means your monthly mortgage payments will increase as well. While if you’re on a Standard Variable Rate your lender decides how much, if any, of the increase they would pass on. But if you’re on a fixed rate mortgage you will only see a change in your repayments when your fixed term ends.

Is now a good time to remortgage?

If your current mortgage deal ends in the next six months, you should start the remortgage process now and keep it under review.

If you’re on your lender’s Standard Variable Rate, locking into a fixed rate not only means you will have certainty over how much you’ll be paying on your mortgage each month but you may also find your repayments drop too. Or if you don’t want to fix, you may prefer remortgaging onto a variable rate deal.

So speak to a broker who can find you the best mortgage rates and talk you through your options.

What are mortgage rates?

Mortgage rates are the rate of interest charged by a mortgage lender (bank or building society). The interest is charged by the lender as compensation for the money they have lent them in order to purchase a property.

Interest rates are determined by the lender in most cases, and can be either fixed (ie remain the same for the term of the mortgage) or variable (where they fluctuate with a benchmark interest rate). Before you compare mortgages, you need to understand the different types. For more information see what type of mortgage should I get?

Help finding the best mortgage deals

The best mortgage deals are not only about the best mortgage rates, you need to consider whether the mortgage term is right for you, arrangement fees and more.

To get a better idea of the best mortgage for you and the cheapest mortgage rates in the UK, use our online mortgage service provided by the fee-free mortgage broker L&C.

L&C can find the best mortgage rates for you over the phone, or you can do it yourself in real-time online. Whichever you choose they can help search the market to find you the best mortgage deals available, see if you qualify and even help you apply online, doing all the legwork to get you your mortgage offer.