Mortgage rates in the UK have seen dramatic fluctuations over the past 60 years. This blog will explore the historic trends in UK mortgage interest rates since the 1960s and how rates have evolved over the decades.
Mortgage Rates in the UK by Decade
1960s
Average mortgage rates in the 1960s ranged between 5-7%. Rates increased gradually through the decade as inflation started rising.
1970s
The 1970s saw double-digit mortgage rates due to high inflation. Rates averaged around 10-12% and continued rising.
1980s
By the 1980s, average mortgage rates in the UK peaked at around 13-15% before starting to fall. Rates remained elevated through most of the decade due to high inflation.
1990s
As inflation was brought under control, average mortgage rates fell to 8-10% during the 1990s.
2000s
Mortgage rates declined significantly in the 2000s, averaging between 4-6%.
2010s
In the 2010s so far, average mortgage rates have ranged between 2-4% thanks to low interest rate policies.
60 Year Average Mortgage Rate
Based on the decade averages, we estimate the 60 year average mortgage rate in the UK to be around 8%.
However, this masks the significant volatility over the decades. Rates have trended downwards from higher historical levels as inflation was reined in.
Current UK Mortgage Rates
Today’s average UK fixed mortgage rates are near historic lows:
2-year fixed rate: ~4.5%
5-year fixed rate: ~4.7%
Variable mortgage rates are lower at 3.5-4% on average.
Low rates make it an attractive time for buyers to obtain a mortgage. However, approving criteria remains strict.
Conclusion
While precise long-term historical data is limited, mortgage rates in the UK appear to have peaked in the 1970s and 1980s before declining to today's lower levels. However, rates remain subject to fluctuations based on economic factors like inflation and central bank policies.
Hopefully this overview gives some perspective on where UK mortgage rates have been and where they may be heading.