The bank of England maintained the bank rate at 5.25% in its recent announcement for the month of February 2024. The bank rates have been on an upward trajectory from December 2021, causing instability in the market. It’s only since August of 2023 that rates have maintained stability at 5.25%.
Official Bank Rates from Bank of England
The stabilised bank rates have allowed inflation to cool down, as the inflation graph shows a fall back from 6.7% in September to 4% in December. The target set by the government is to bring the economy to a 2% inflation rate through monetary policies implemented by the MPC. There is popular demand from property investors and home buyers for a cut down in the mortgage interest rates in the next announcement, which is on 21st of March 2024, but it is only expected that the interest rates increase to help bring inflation down to 2%.
The rates vary depending on the mortgage lender and the deposit amount put down. Here is a recently updated mortgage rate breakdown given by Rightmove for property buyers with deposit up to 25%.
| Loan to
value (LTV) |
Term | Average rate
28 Feb 2024 |
Average rate
5 Mar 2024 |
Weekly Change |
| 85% | 2-year fixed | 5.14% | 5.18% | +0.04% |
| 85% | 5-year fixed | 4.73% | 4.75% | +0.02% |
| 75% | 2-year fixed | 4.99% | 5.04% | +0.05% |
| 75% | 5-year fixed | 4.70% | 4.72% | +0.02% |
The rates are taken from Podium.
Rightmove has calculated the current average mortgage rate for a five-year fixed mortgage rate as 4.82% and for a two-year fixed rate as 5.19%. It was also found that the lowest five-year fixed rate currently is 4.13%, and for two-year fixed rate it is 4.46%.
Inflation is expected to reach the ideal rate of 2% in the Q2 of 2024, but it is also forecasted that inflation rates will rise once again in Q3. The bank rates will be fixed accordingly by MPC to control the inflation. The upcoming bank rates – monetary policy summary will be published on 21st March 2024, so watch out for the update.
