What is the average mortgage rate in the UK 2026?

As of March 2026, average 2-year fixed rates are around 4.5-5.5% and 5-year fixed rates are around 4.3-5.2%, depending on your loan-to-value ratio. The lowest rates require larger deposits (40%+), while 90-95% LTV mortgages have higher rates. Tracker and variable rates start from around 4.5%.

Should I fix my mortgage for 2 or 5 years?

5-year fixes offer more certainty and are often not much more expensive than 2-year fixes. They protect you from rate rises for longer and reduce remortgaging hassle. 2-year fixes make sense if you think rates will fall significantly or you might move within 2 years. Currently, 5-year fixes are often recommended.

What deposit do I need for the best mortgage rates?

Generally, 40%+ deposit (60% LTV) gets the best rates. However, meaningful rate improvements happen at each LTV threshold: 95%, 90%, 85%, 80%, 75%, and 60%. Even moving from 90% to 85% LTV can improve your rate noticeably.

Best Mortgage Rates UK 2026 — Compare Today's Rates | PocketWise

Mortgage rates vary significantly depending on your deposit, the deal type, and the lender. Here’s how to find the best rate for your situation.

Current Mortgage Rates Overview

Rates are indicative and change frequently. Always check current offers.

Fixed Rate Mortgages

LTV	2-Year Fixed	5-Year Fixed
60%	4.2-4.6%	4.0-4.4%
75%	4.4-4.9%	4.2-4.7%
85%	4.8-5.3%	4.6-5.1%
90%	5.2-5.8%	5.0-5.5%
95%	5.5-6.2%	5.3-5.9%

Variable Rate Mortgages

Type	Typical Rate	Notes
Tracker	Base rate + 0.5-1.5%	Follows Bank of England rate
Discount	SVR minus 1-2%	Discounted from lender’s SVR
SVR	6.5-8.5%	Lender’s standard rate

Best Rates by Buyer Type

First-Time Buyers

LTV	Considerations	Typical Rates
95%	Minimum deposit	5.5-6.2%
90%	10% deposit	5.2-5.8%
85%	Help from family	4.8-5.3%

First-time buyer specific deals often have lower fees or cashback.

Home Movers

Situation	Strategy
Significant equity	Use for larger deposit, get better rate
Porting mortgage	Check if current deal is portable
Chain-free	More attractive to sellers

Remortgaging

Current Situation	Consider
On SVR	Almost certainly remortgage
Fixed deal ending	Shop around early (3-6 months before)
Current rate OK	Calculate if switching is worth fees

Buy-to-Let

LTV	Typical Rates	Notes
60%	4.5-5.2%	Best BTL rates
75%	5.0-5.8%	Standard BTL LTV

BTL rates are typically 0.5-1% higher than residential.

How LTV Affects Your Rate

The LTV Tiers

LTV	What It Means	Rate Impact
95%	5% deposit	Highest rates
90%	10% deposit	Better rates available
85%	15% deposit	Noticeable improvement
80%	20% deposit	Good selection
75%	25% deposit	Very competitive
60%	40% deposit	Best rates

Monthly Payment Difference

£250,000 mortgage, 25-year term:

LTV	Rate	Monthly Payment	vs 60% LTV
60%	4.3%	£1,363	—
75%	4.6%	£1,405	+£42/month
85%	5.0%	£1,461	+£98/month
90%	5.5%	£1,533	+£170/month
95%	5.9%	£1,592	+£229/month

Over 2 years, the 95% LTV borrower pays £5,496 more than the 60% LTV borrower.

Fixed vs Tracker vs Variable

Fixed Rate

Pros	Cons
Payment certainty	Locked in if rates fall
Budget confidence	Early repayment charges
Protection from rises	May miss out on tracker falls

Tracker Rate

Pros	Cons
Falls if base rate falls	Rises if base rate rises
Often lower initial rates	Payment uncertainty
Usually lower ERCs	Need to budget for rises

When to Choose Each

Situation	Consider
Value certainty	Fixed
Think rates will fall	Tracker
Planning to move	Short fix or tracker
Tight budget	Fixed (for certainty)

Mortgage Fees Explained

Common Fees

Fee	Typical Amount	Notes
Arrangement fee	£0-2,000	Can often add to mortgage
Booking fee	£0-250	Non-refundable
Valuation fee	Often free	Some lenders charge
Legal fees	£300-1,000	Some deals include free legals

Fee vs Rate Trade-off

Option	Rate	Fee	True Cost (£200k, 2yr)
Low rate, high fee	4.5%	£1,500	£19,548 + £1,500 = £21,048
Slightly higher rate, no fee	4.7%	£0	£19,948 + £0 = £19,948

Sometimes the “higher” rate is actually cheaper overall.

How to Get the Best Rate

1. Improve Your LTV

Action	Impact
Save larger deposit	Better rate tier
Use gifted deposit	Same effect
Overpay existing mortgage	Lower LTV at remortgage
Wait for house prices to rise	Passive LTV improvement

2. Boost Your Credit Score

Action	Impact
Check credit file for errors	Remove incorrect negatives
Register on electoral roll	Basic requirement
Pay bills on time	6+ months before applying
Reduce credit utilisation	Below 30% of limits

3. Compare Total Cost

Factor	Include
Interest over deal period	Primary cost
Arrangement fee	Add to total
Valuation/legal fees	Include if charged
Cashback	Subtract from cost

4. Use a Mortgage Broker

Broker Benefits	Considerations
Access to full market	May charge fee (often £300-500)
Expert advice	Check if whole-of-market
Handles application	Free brokers exist too
Knows lender criteria

Best Rate Comparison: £300,000 Property, £240,000 Mortgage (80% LTV)

Lender Type	Rate	Fee	Monthly	5-Year Cost
Best rate	4.4%	£999	£1,320	£80,199
No fee	4.6%	£0	£1,346	£80,760
Cashback	4.7%	-£500	£1,360	£81,100

Actual lender offers will vary — this is illustrative.

When to Remortgage

Good Times to Remortgage

Situation	Action
Current deal ending in 3-6 months	Start looking now
On SVR	Almost always worth switching
Significant equity gained	Could get better LTV tier

When Remortgaging May Not Be Worth It

Situation	Consider
High early repayment charges	Cost vs benefit of waiting
Moving soon	May need flexible mortgage
Only small rate improvement	Fees may outweigh savings

Key Takeaways

LTV is crucial — bigger deposit = better rate
Compare total cost — not just the rate
Consider fee vs rate — lower rate isn’t always cheaper
Use a broker — access to full market and expertise
Start early — 3-6 months before you need it
5-year fixes — often good value currently

For more, see our mortgage calculator and how to get the best mortgage rate.