When Will Mortgage Rates Go Down?

Will mortgage rates go down

The question “when will mortgage rates go down?” is consistently asked by many people during every day conversations, reflecting the concern many homeowners and prospective buyers have about the future of their mortgage payments. In recent years, rates have fluctuated leaving many confused as to what buying, moving, or remortgaging now could mean for them. If you are one of the people asking this question, understanding the dynamics that influence mortgage rates can help in anticipating future changes and planning accordingly.

Why Are Mortgage Rates Fluctuating in the UK?

Mortgage rates in the UK have experienced significant fluctuations over the past few years. These changes are primarily driven by the Bank of England’s base rate adjustments, which are influenced by economic factors such as inflation and economic growth.

In recent years, the base rate has seen multiple increases to combat rising inflation. This has led to corresponding hikes in mortgage rates. For instance, after the Bank of England started raising the base rate from 0.1% to tackle surging inflation, mortgage rates rose sharply, particularly after the economic turbulence following the mini-budget of September 2022.

However, 2023 saw a period of declining mortgage rates as inflationary pressures eased and the market began to predict a peak in the base rate. This trend was disrupted in early 2024 as fixed mortgage rates began to rise again in response to expectations of slower and fewer base rate cuts than previously anticipated.

Current Mortgage Rates in the UK

As of May 30, 2024, the average mortgage rates were:

– 2-year fixed mortgage rate: 5.41%

– 5-year fixed mortgage rate: 5.04%

– Standard Variable Rate (SVR): 8.18%

These rates reflect a market that has seen substantial increases from the lows of December 2021, when the average 2-year fixed mortgage rate was just 2.34%. The sharp rise in rates highlights the volatility that borrowers need to navigate.

When Will Mortgage Rates Go Down?

Predicting the exact timing of mortgage rate cuts is challenging due to the complex interplay of economic factors. However, there are some key indicators and forecasts that can provide guidance.

Base Rate Predictions

The Bank of England’s base rate decisions are crucial. While a cut in the base rate was hoped for in June 2024, higher-than-expected inflation figures have reduced the likelihood of immediate reductions. Many experts now believe that the first base rate cut could happen in August 2024, with some predicting it may not occur until September 2024.

A reduction in the base rate typically leads to lower mortgage rates, as lenders adjust their rates in response to the decreased cost of borrowing. Therefore, any future cuts in the base rate will likely result in corresponding decreases in mortgage rates.

Inflation and Economic Outlook

Inflation is a key factor influencing the Bank of England’s decisions. As of June 2024, inflation stands at 2.3%, slightly above the Bank’s target of 2%. A sustained decrease in inflation would support arguments for lowering the base rate, which in turn could lead to lower mortgage rates.

Economic growth and stability also play significant roles. Should the UK economy show signs of robust growth and stability, it may prompt the Bank to reduce rates to support borrowing and investment.

The Impact of Mortgage Rate Changes

For Homeowners:

For existing homeowners, changes in mortgage rates can significantly affect monthly payments. Those on variable or tracker mortgages will see immediate changes in their payments following a base rate adjustment. Fixed-rate mortgage holders will be impacted when their current deals end, potentially facing higher rates if they need to remortgage in a high-rate environment.

For First-Time Buyers:

First-time buyers are particularly sensitive to mortgage rate changes. Higher rates can reduce the amount they can borrow and increase monthly payments, making it more difficult to enter the property market. However, a reduction in rates could ease these pressures, making homeownership more accessible.

Is 2024 a Good Time to Remortgage?

Whether 2024 is a good time to remortgage depends on individual circumstances. For many, remortgaging can offer significant savings, especially if their current deal is ending and they face a shift to a higher Standard Variable Rate (SVR).

Financial Conduct Authority (FCA) data shows that around 1.5 million homeowners will see their fixed-rate mortgage deals end in 2024. Remortgaging now to lock in a potentially lower rate before any further increases could be beneficial. 

What to Expect in the Future

Looking beyond 2024, there is cautious optimism that mortgage rates will decrease gradually. The Office for Budget Responsibility (OBR) forecasts suggest that while mortgage rates may rise from their historic lows, they are expected to stabilise and potentially decrease as inflation and economic pressures ease.

By the end of 2028, UK house prices are forecasted to grow by 21.6%, suggesting that the property market will remain resilient. However, the exact trajectory of mortgage rates will depend on a combination of economic factors and policy decisions by the Bank of England.


While predicting the exact timing of mortgage rate cuts is difficult, current forecasts suggest a potential reduction in the latter half of 2024. Homeowners and prospective buyers should stay informed about economic indicators and base rate decisions to make well-timed financial decisions. Engaging with a mortgage advisor can provide personalised insights and help navigate the complexities of the mortgage market.

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