Interest rates had been cut to 5% from 5.25% in August - the first reduction since March 2020. They had remained at that level since August 2023 having undergone 14 consecutive rises from December 2021, when they stood at just 0.1%. The next interest rate announcement will be on 7 November.
Steadying interest rates, and August's fall, have been made possible by continued cooling inflation.
The most recent figures from the Office for National Statistics (ONS) show that annual inflation fell to 1.7% in September. It had edged up to 2.2% in July and remained there in August, but for the two preceding months had met the Bank's of England's target of 2%.
The latest fall is attributed largely to drops in petrol prices and air fares.
In September 2023, the annual inflation figure was 6.7%.
Good news on inflation and interest rates has triggered lenders to lower mortgage costs with a growing number of high street lenders now offering five-year fixes at under 4%, for example. However, more recently, during uncertainty in the lead-up to tomorrow's Autumn Budget, lenders with some of the keenest rates have repriced upwards again.
But how much can borrowers expect to pay right now?
Rates vary according to lender and deposit size, but according to our mortgage partner Better.co.uk, the average cost of a two-year fixed-rate mortgage, across all borrower types* today, stands at 4.65%. The average cost of three- and five-year deals is 4.51% and 4.19% respectively.
The best two-year fix is currently priced at 3.96%, while the best three- and five-year deals at 4.04% and 3.74% respectively.
The average two-year tracker rate mortgage is priced at 5.39%, with the best in this category priced at 5.14%.
The typical standard variable rate (SVR) stands at 7.42%, according to Better.co.uk. The SVR is usually what borrowers revert to once their deal, such as a fix or tracker, has expired.
In terms of mortgage availability, as of 1 October there were 6,645 residential mortgage deals on the market according to data provider, Moneyfacts. This compares to 6,460 on 1 September. The number has been steadily growing as market confidence has improved. On 1 February for example, it stood at 5,787.
Below is a live table of the mortgage deals available today. You'll find guidance on how to use the table underneath it.
When the Bank Rate rises or falls, it has an effect on the cost of mortgages.
There are more than a million homeowners (according to trade body, UK Finance) on variable rate deals, such as trackers, whose payment will immediately either rise or fall when Bank Rate is adjusted.
If Bank Rate fell by 0.25 percentage points for example, a tracker deal priced at 5.50% would be repriced to 5.25%. This would slice £30 a month off the cost of a £200,000 loan taken over 25 years, with monthly repayments falling from £1,258 to £1,128.
Borrowers on fixed-rate deals, where the interest rate is locked in, would not see the benefit of a fall in the Bank Rate. However, nor would their rate rise if Bank Rate was pegged upwards.
Around 700,000 borrowers are coming to the end of their fixed rate deals over the second half of 2024 according to figures from UK Finance - and, despite the August fall in Bank Rate, new available deals will be considerably more expensive.
You can work out the monthly cost of a mortgage against various interest rates with our Mortgage Calculator.
The most recent data is pointing towards an increasingly buoyant property market, following the August fall in interest rates and continued stable, or falling, inflation.
The latest Office for National Statistics (ONS) data (published 16 October) reported six consecutive months of house price rises to August. It said that average values during the month were 2.8% higher compared to August last year. The ONS puts the cost of an average home in August at £293,000 compared to £290,000 July.
Halifax's latest house price report (published 7 October) reported that the value of the average home was 4.7% higher in September on the previous year, while Nationwide building society (report published 30 September) put annual house price inflation slightly lower at 3.7%. Both lenders say it's the strongest annual growth they have seen since November 2022.
However the most recent report from Rightmove (21 October), which measures asking prices, showed values increased by 0.3% in October compared to the previous month - considerably less than the seasonal average rise of 1.3%. On an annual basis prices were 1% higher compared to October 2023 with the average home being listed for sale at £371,958.
However, market activity was strong with sales agreed up by 29% on last year.
Interest rates underwent 14 consecutive rises between December 2021 and August 2023 as the Bank of England's Monetary Policy Committee (MPC) used hikes to cool the economy and tame soaring inflation.
Annual inflation, as measured by the Consumer Prices Index (CPI), peaked at 11.1% in October 2022. By May 2024 it had fallen to 2%, which is the Bank's official target. It remained at 2% in June before rising slightly to 2.2% in July where it remained in August before falling steeply to 1.7% in September.
The latest fall in inflation means the Bank of England looks more likely to cut its benchmark Bank Rate, currently at 5%, when it next meets on 7 November.
One of the main drivers behind runaway inflation had been the rising cost of energy bills. Energy regulator Ofgem's energy price cap, which dictates the nation's energy bills, was as high as £4,279 in the first quarter of 2023, although government intervention had applied a temporary ceiling of £2,500.
The current cap (from 1 October 2024) is at £1,717 a year. While this marks a 10% rise on the previous quarter's cap, it still means that bills are cheaper than last winter.
Ofgem's energy price cap is the quarterly figure that represents the annual bill of a typical household paying monthly by direct debit, although actual bills are always determined by consumption.
Keeping track of mortgage costs can challenging - especially when rates can change on a daily basis. One simple way is use our mortgage tables, powered by Better.co.uk.
To find out what deals are available at today's rates for the kind of mortgage you're after, enter your personal criteria into our mortgage table (above). Here's what to do:
Mortgage deals offering the cheapest rates usually come with fees attached. You can opt to pay these upfront or add them to the loan. To factor in the cost of the fee, order your the results by 'initial period cost' in the 'sorted by' dropdown.
Alternatively, you can order results by initial rate, lowest fee or monthly repayment - even by the lender's 'follow on' rate that the deal will revert to at the end of the term.
The very cheapest are reserved for larger deposit amounts, usually of 60% of the property value or more. In all cases, you will need a sufficient income and a clean credit history to be accepted for a mortgage.
If you want to see what your monthly mortgage payments might look like in different scenarios while overlaid with household bills, our Mortgage Calculator will crunch the numbers.
Once issued, mortgage offers tend to be valid for six months, although some lenders honour offers for up to 12 months. If you are looking to remortgage your current home, this means you can lock in a rate today - at no cost and with no strings attached.
*Average mortgage costs can vary between sources depending on how the data is gathered. Better.co.uk's data refers to the average cost of a fixed rate mortgage recommendation that is created and issued to applicants over the last seven days from its panel of over 100 lenders.
The data counts remortgage and purchase loans but excludes SVRs, adverse credit, self-build and shared ownership. Data is collected at the end of each business day.
Better.co.uk targets applicants with a good credit history. Lower loan-to-values (under 85%) account for a significant portion of its business which can translate into cheaper loan rates.