Is 5% a good mortgage rate UK 2026?

A 5% mortgage rate is about average for 2026. The cheapest deals are around 4-4.5% for borrowers with larger deposits (60% LTV or lower), while 5% is typical for moderate deposits or higher LTV. It's below the historical long-term average of 5-6% and well below the rates of 6-7% seen in late 2022. Not the cheapest available, but not unreasonable.

What should I be paying for a mortgage in 2026?

In 2026, competitive mortgage rates range from about 4% (best 2-year fixes at low LTV) to 5.5% (higher LTV or less competitive lenders). If you're being offered 5%, you're in the mid-range. Shopping around or using a mortgage broker could save you 0.25-0.5%, which adds up to thousands over the mortgage term.

Is it worth waiting for mortgage rates to drop?

It depends on your situation. If rates are expected to fall gradually, a shorter-term fix (2 years) lets you remortgage sooner at potentially lower rates. But no one can predict correctly — waiting to buy while paying rent may cost more than accepting today's rates. Focus on affordability rather than trying to time the market perfectly.

How much is a 5% mortgage per month?

On a £250,000 mortgage over 25 years at 5%, monthly payments are approximately £1,462. For comparison, at 4% you'd pay £1,320 (saving £142/month). The difference between 4% and 5% on £250,000 over 25 years totals approximately £42,600 in extra interest — so it's worth shopping around to get the best rate.

Is a 5% Mortgage Rate Good? — Current Market Context 2026 | PocketWise

Is a 5% Mortgage Rate Good? — Current Market Context 2026

Is 5% a good mortgage interest rate in 2026? How it compares historically, what it means for monthly payments, and whether you should accept or wait for better deals.

By PocketWise · 8 April 2026 · 3 min read

If you’ve been offered a 5% mortgage rate, here’s whether that’s competitive in today’s market and what you can do about it.

Where 5% Sits in the Current Market

Rate bracket	2026 assessment	Who typically gets this
3.8-4.2%	Excellent	60% LTV or lower, clean credit
4.2-4.5%	Very good	70-75% LTV, good credit
4.5-5.0%	Good	80-85% LTV, standard applications
5.0-5.5%	Average	85-90% LTV, some credit issues
5.5-6.0%	Below average	90-95% LTV, higher risk
6.0%+	Poor	Specialist, adverse credit

A 5% rate is mid-market — acceptable but worth trying to improve.

Historical Context

Period	Average best-buy rate	5% would be…
1990s	7-10%	Excellent
2000s	4-6%	Average
2010-2019	1.5-3%	Poor
2020-2022	1-2.5%	Very poor
Late 2022 (post mini-budget)	5-6.5%	Average
2024-2026	4-5.5%	Average
Long-term average	~5-6%	Normal

By historical standards, 5% is perfectly normal — it’s the ultra-low rates of 2020-2022 that were unusual.

Monthly Payment Comparison

Mortgage	At 4%	At 5%	At 6%	4% vs 5% difference
£150,000 (25yr)	£792	£877	£966	£85/month
£200,000 (25yr)	£1,056	£1,170	£1,289	£114/month
£250,000 (25yr)	£1,320	£1,462	£1,611	£142/month
£300,000 (25yr)	£1,584	£1,755	£1,933	£171/month
£400,000 (25yr)	£2,111	£2,339	£2,577	£228/month

Total Interest Over the Mortgage Term

Mortgage	Total interest at 4%	Total interest at 5%	Extra cost at 5%
£150,000 (25yr)	£87,600	£113,100	£25,500
£200,000 (25yr)	£116,800	£150,900	£34,100
£250,000 (25yr)	£146,000	£188,600	£42,600
£300,000 (25yr)	£175,200	£226,500	£51,300

Even 1% makes a significant difference over 25 years.

How to Get Below 5%

Strategy	Potential improvement
Increase your deposit	Higher LTV = higher rate. Moving from 90% to 85% can save 0.2-0.5%
Improve your credit score	Better score = better rates
Use a mortgage broker	Access to deals not on comparison sites
Consider a shorter fix	2-year fixes are sometimes cheaper than 5-year
Product transfer	Your current lender may offer competitive internal deals
Look at building societies	Often competitive on rates, especially local ones
Fee-free vs fee-paying deals	A higher-fee deal may have a lower rate that saves more overall

Should You Accept 5% or Wait?

Situation	Recommendation
First-time buyer ready to go	Accept — renting costs money too
Remortgaging from SVR (7%+)	Accept — 5% is much better than SVR
Remortgaging from 2% fix	Accept best available — aim for under 5% if possible
Can wait 6-12 months	Short delay may help if rates trend down
Market uncertain	Take a 2-year fix for flexibility

The Cost of Waiting

If you’re paying rent while waiting for rates to drop:

Monthly rent	6-month cost	If rates drop 0.5% (saving on £250k)
£1,000	£6,000	Saves £86/month (£1,032/year)
£1,200	£7,200	Would take 7+ years to break even
£1,500	£9,000	Would take 9+ years to break even

Waiting rarely pays off unless rates drop dramatically.

Fixed vs Tracker at 5%

Choice	At 5%	Advantage
2-year fix at 5%	Payments locked	Certainty, remortgage in 2 years
5-year fix at 4.8%	Payments locked longer	Less hassle, sometimes cheaper
Tracker at base rate + 0.75%	Currently ~5.25%	Falls if base rate drops

If you expect rates to fall within 2 years, a short fix lets you remortgage to a better deal sooner.

Should I Fix or Go Variable? — choosing your rate type
Remortgaging Guide — how to switch deals
How Much Can I Borrow? — affordability check
First-Time Buyer Guide — getting on the ladder