Average mortgage interest rate: what do the stats say about the best mortgage length?

Average mortgage interest rates are a good place to start your fixed-term mortgage comparison

average mortgage interest rate
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Curious to know what the average mortgage interest rate is right now? Average rates won't tell you what the best mortgage rate is for you personally, under your current circumstances. But, they do give you a good idea of the average value for money for different length fixed-term mortgages, compared to variable rate mortgages. 

Of course, this method of mortgage comparison only really works if there are no drastic changes to the base interest rate from the Bank of England. However, given that the base interest rate levels have remained relatively stagnant for a good number of few years now, comparing average mortgage interest rates may well give you a clue to what type of mortgage you should be going after.

The average mortgage rate chart for the time period between 2014 and 2019 shows a clear downward trajectory, with interest rates steadily falling over the five years.

If a longer-term fixed rate mortgage is what you're after, now is definitely the time to get one: the 10-year fixed mortgage in particular is a much, much more attractive proposition as of September 2019 at an average of 2.65 per cent than it was in September 2014 at 4.06 per cent. 

However, if you want the hands-down best mortgage rate, there is some competition between the two-year fixed rate mortgage (average rate of just 1.56 per cent in September 2019) and the two-year standard variable mortgage. It wasn't as good a deal last September as the two-year fixed rate, at 1.61 per cent. But, back in September 2016, a standard variable mortgage came in at 1.54 per cent – cheaper than the two-year fixed average of 1.59 per cent. In fact, it wasn't until the very end of 2016 that the standard two-year variable became more expensive, on average, than a two-year fixed rate.  

The main takeaway from this is that, right now, a two-year fixed rate mortgage is your best bet as far as average mortgage rates go, with a real possibility (though, of course, no guarantee) that the standard variable rates could again become cheaper within the next two-year time period.  

Ready to compare the different two-year mortgages available? Use the mortgage specialist Habito's comparison tool below.