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Average Mortgage Rates and Loans UK 2023
Average Mortgage Interest Rates
Mortgage rates vary by many factors, such as the duration of the loan or fixed period, the loan to value ratio (LTV), if the rate is fixed or variable, whether the loan is for a property that will be rented out or lived in by the owner, and more.
Regardless, mortgage rates are on the rise—in particular, fixed-rate mortgages. The chart below shows rates for 2-year fixed (green) and variable (purple) rate mortgages, across three different LTV ratios.
Interestingly, the rates have largely converged across LTV ratios for mortgages. Banks used to charge quite a bit less (e.g. up to 2.5 percentage points less in 2021) for loans with lower LTV ratios, because a smaller LTV is less risky for the lender. But now lenders are charging almost the same rate regardless of LTV ratio, especially for variable rate loans. In November 2022, there was only a 0.09% difference between a 95% LTV and 75% LTV 2-year variable rate loan (average rates of 4.0% and 3.91%, respectively).
As a result, rates are up even more for mortgages with a lower LTV ratio. For example, the interest rate on fixed, 2-year 75% LTV loans are now 3.9X the rate from a year ago (average of 1.5% in November 2021 to 6.0% in November 2022).
| Variable | Fixed | |||||
|---|---|---|---|---|---|---|
| 95% LTV | 90% LTV | 75% LTV | 95% LTV | 90% LTV | 75% LTV | |
| 30-Nov-21 | 3.30% | 2.5% | 1.7% | 2.9% | 2.0% | 1.5% |
| 30-Nov-22 | 4.0% | 4.12% | 3.9% | 6.6% | 6.3% | 6.0% |
| How much higher are rates now? | 1.2X | 1.6X | 2.3X | 2.3X | 3.1X | 3.9X |
And very oddly, the average rate for a 90% LTV (4.12%) was actually higher than the rate on a riskier 95% LTV (4.0%) for 2-year variable loans in November 2022. You can see these figures bolded in the table above.
Average Mortgage Loan Size
At the end of 2022, the average mortgage loan had peaked just above £200,000 for the first time. In the third quarter of 2022 (June 2022 - September 2022), £84,805,000,000 was lent to individuals over 423,865 properties—an average of £200,075 per loan. That's a rise of 13% in just two years.
Methodology & Data
NimbleFins analysed data from the Bank of England to determine average mortgage loan sizes as well as compare mortgage interest rates.
The following Bank of England data sets were used for the interest rate figures:
| 2-year mortgage rates | 95% LTV | 90% LTV | 75% LTV |
|---|---|---|---|
| variable | IUM2WDT | IUMB479 | IUMBV48 |
| fixed | IUM2WTL | IUMB482 | IUMBV34 |
To determine the average mortgage size, we used two metrics to approximate the average loan:
- amount of total sterling secured gross lending to individuals
- total sterling number of transactions with individuals secured on residential property
Note, the resulting figures will not be exact, since the total lending figure does not exclusively reflect mortgages, however the vast bulk of secured lending will be for homes.
| Date | Value of secured lending to individuals (£millions) | # of residential mortgages per quarter | Average mortgage size |
|---|---|---|---|
| 31 Mar 13 | £34,055 | 265,912 | £128,069 |
| 30 Jun 13 | £42,454 | 322,108 | £131,801 |
| 30 Sep 13 | £49,914 | 361,179 | £138,197 |
| 31 Dec 13 | £51,294 | 357,481 | £143,487 |
| 31 Mar 14 | £46,208 | 312,747 | £147,749 |
| 30 Jun 14 | £51,419 | 339,361 | £151,517 |
| 30 Sep 14 | £54,985 | 367,819 | £149,489 |
| 31 Dec 14 | £50,698 | 350,197 | £144,770 |
| 31 Mar 15 | £45,017 | 302,785 | £148,676 |
| 30 Jun 15 | £52,671 | 349,743 | £150,599 |
| 30 Sep 15 | £61,778 | 393,688 | £156,921 |
| 31 Dec 15 | £62,303 | 390,141 | £159,694 |
| 31 Mar 16 | £63,322 | 391,776 | £161,628 |
| 30 Jun 16 | £57,496 | 369,294 | £155,692 |
| 30 Sep 16 | £63,898 | 392,035 | £162,991 |
| 31 Dec 16 | £61,830 | 380,648 | £162,434 |
| 31 Mar 17 | £59,941 | 375,708 | £159,541 |
| 30 Jun 17 | £62,254 | 390,761 | £159,315 |
| 30 Sep 17 | £69,091 | 424,943 | £162,589 |
| 31 Dec 17 | £68,527 | 424,918 | £161,271 |
| 31 Mar 18 | £61,289 | 387,243 | £158,270 |
| 30 Jun 18 | £65,317 | 406,458 | £160,698 |
| 30 Sep 18 | £71,620 | 433,065 | £165,379 |
| 31 Dec 18 | £70,493 | 429,597 | £164,091 |
| 31 Mar 19 | £62,146 | 388,369 | £160,018 |
| 30 Jun 19 | £64,380 | 393,143 | £163,757 |
| 30 Sep 19 | £70,975 | 421,665 | £168,321 |
| 31 Dec 19 | £71,506 | 424,506 | £168,445 |
| 31 Mar 20 | £64,711 | 402,265 | £160,867 |
| 30 Jun 20 | £43,775 | 270,182 | £162,020 |
| 30 Sep 20 | £61,495 | 346,531 | £177,459 |
| 31 Dec 20 | £75,734 | 413,212 | £183,281 |
| 31 Mar 21 | £82,447 | 438,704 | £187,933 |
| 30 Jun 21 | £86,103 | 445,146 | £193,426 |
| 30 Sep 21 | £71,606 | 407,757 | £175,609 |
| 31 Dec 21 | £68,317 | 377,846 | £180,806 |
| 31 Mar 22 | £74,211 | 390,590 | £189,997 |
| 30 Jun 22 | £76,943 | 392,175 | £196,196 |
| 30 Sep 22 | £84,805 | 423,865 | £200,075 |