The Bank of England cut interest rates in May to 4.25% from 4.5% in the second rate reduction of the year. The cut was widely expected as a cautious response to continued global trade tensions and the potential for an increase in inflation.
The Bank’s next interest rate announcement is scheduled for 19 June.
What’s happening with inflation?
The most recent inflation figures from the Office for National Statistics (ONS) show that the rate at which prices are rising (as measured by the Consumer Prices Index or CPI) stood at 3.5% in the year to April 2025 – up sharply from 2.6% in March thanks to a clutch of price rises and higher council tax bills.
Despite the chunky increase, inflation is expected to fall later this year towards the Bank of England’s 2% target. Analysts believe that cooling inflation will encourage the Bank to continue with interest rate cuts, with the financial markets pricing in two further reductions this year to 3.75%.
However, inflationary pressures within the UK and global economies remain, and there may be further bumps along the road, so nothing can be taken for granted.
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Average cost of popular deals
After months of consistently reducing the cost of mortgage deals, some lenders have more recently been adjusting prices upwards. So how much can borrowers expect to pay for their mortgage rate right now?
Costs 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 4.30%. The average cost of three- and five-year deals is 4.32% and 4.17% respectively.
The best two-year fixed rate deal today is priced at 3.49%, with the best three- and five-year deals priced at 3.92% and 3.61% respectively.
The average two-year tracker rate mortgage is priced at 4.78%, with the best in this category priced at 4.54%.
The typical standard variable rate (SVR) today is now at 6.74%, according to Better.co.uk. The SVR is usually what borrowers revert to, once their fixed or tracker deal has expired.
At the start of June there were 6,866 residential mortgage deals available on the market, according to data provider Moneyfacts. This is down just slightly from the 6,993 available at the start of May. However, numbers fluctuate daily.
Below is a live table of the mortgage deals available today. You’ll find guidance on how to use the table underneath.
How does Bank Rate affect mortgages?
When the Bank Rate rises or falls, it affects the cost of mortgages.
An estimated 1.2 million people are on SVR mortgages, where their lender can adjust the rate of interest after a Bank Rate change if it wishes to do so. A further million borrowers are on variable rate deals such as trackers, according to trade body, UK Finance. Their monthly repayments will immediately rise or fall when Bank Rate is adjusted.
If Bank Rate fell by 0.25 percentage points for example, a tracker deal priced at 5.50% would be repriced to 5.25%. This would slice £30 a month off the cost of a £200,000 loan taken over 25 years, with monthly repayments falling from £1,258 to £1,128.
Borrowers on fixed-rate deals, where the interest rate is locked in, would not see the benefit of a fall in the Bank Rate. However, nor would their rate rise if Bank Rate was pegged upwards.
You can work out the monthly cost of a mortgage against various interest rates with our mortgage calculator.
What about house prices?
The most recent data from Halifax shows that average house prices increased by 2.5% in the last 12 months, despite a monthly dip in May of 0.4%. The lender, the UK’s largest, puts the cost of a typical UK property in May at £296,648.
Nationwide’s May house price report puts the annual rate of inflation higher than Halifax at 3.5%. It also said that average prices rose by 0.5% in May. The lender, which is the UK’s largest building society, puts the cost of a typical property during the month at £273,427.
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 larger deposit amounts, usually of 60% of the property value or more. In all cases, you will need a sufficient income and a 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.
