When it comes to mortgage rates UK trends have been disappointing recently. In 2013, borrowers could secure an amazingly low rate of under 2.5% for half a decade. These days, you are lucky if you can get a five year deal for less than 3%. Given these current mortgage rates United Kingdom homeowners probably regret not landing a ridiculously low rate, when they had the chance. Notwithstanding, lots of opportunities remain to obtain a competitively priced home loan.


When considering mortgage interest rates UK borrowers have clearly benefited from rising property prices, if they wish to re mortgage. Following the peak in 2007, many borrowers saw their equity crash. Either that, or their loan amount rose to close to the value of their property. These people might discover that rising prices have put them in a position where they can obtain an improved rate.


Fixed mortgage rate prices are governed by numerous variables. Primarily though, they are based on whether banks can access affordable capital to lend to people. Normally, other banks lend this capital to them, or they access the capital from savers. Banks will borrow on money markets, purchasing cash at a particular rate (known as the "swap" rate) for specified periods. Swap rates fluctuate, depending on interest rate forecasts and this impacts mortgage prices. The majority of 2013 saw the driving down of five and two year swap rates, resulting in a fall in fixed rate mortgage prices. However, those swap rates rose in the latter part of 2013, and at the start of 2014. Consequently, new fixed mortgage prices rose as well.


In 2013, borrowers with £180,000.00 mortgages on £200,000.00 homes could have enjoyed a 10% increase in the value of their properties, due to rapid property price inflation. Before, they could have only borrowed at 90% loan to value. However, if their home now had a value of £220,000.00, and some of their debt had been settled after twelve months of mortgage repayments, they would fall within the 80% loan to value category and receive a superior rate.


For the best mortgage rates UK borrowers are spoilt for choice. Big lenders are fighting hard to lure mortgage customers, offering attractive bargains by cutting their rates as low as possible. Barclays will soon offer what it claims are its' most competitive ever rates, featuring a 3.49% fixed rate for ten years, a 2.85% fixed rate for five years, and a 2.29% fixed rate for three years. These bargains all have a £999.00 charge, and are targeted at homeowners with 40% deposits. Furthermore, HSBC have recently introduced a special 0.99% deal, also aimed at borrowers with 40% deposits. The bank claims that it has never offered a more competitive rate.



These bargains are just a small example of the many rate reductions which have occurred recently, as creditors try to make their products stand out from the crowd. Industry commentators say that this intense competition for the business of mortgage holders is the result of creditors trying to fulfil their yearly targets. Also, creditors are attempting to recoup some lost ground, following the introduction of more stringent rules governing mortgage loans, earlier in 2014, which created some market disruption. Indeed, the biggest hurdle that many current borrowers face is the need for financial guidance and the stricter affordability assessments that were imposed by the mortgage market review.