Mortgage interest rates are one of the most important factors that potential borrowers need to consider when they apply for a mortgage. The UK mortgage market has seen a period of unprecedented low-interest rates. However, with the economic recovery in sight, there are concerns that interest rates may start to rise again in 2023. We will explore what may happen to UK mortgage interest rates in 2023, and what this means for prospective mortgage borrowers.

Current UK Mortgage Interest Rates

At the end of 2022 interest rates started to increase, we can speculate that it was due to the government’s budget announcement. At the beginning of 2023 interest rates started to fall. Throughout 2023 interest rates have been falling but as we went into February this started to slow down.

Bank of England Monetary Policy

The Bank of England is responsible for setting the base interest rate, which influences the interest rates offered by lenders in the UK. The Bank of England is expected to increase interest rates in order to drive inflation down. The Bank of England have increased the base rate several times and at 8th March 2023 it is now at 4%.

Impact on Mortgage Interest Rates

Rising interest rates will have a significant impact on mortgage interest rates in the UK. As interest rates increase, lenders will need to increase the interest rates they charge to maintain profitability. However, the rate of increase will depend on a range of factors, including competition among lenders, the demand for mortgages, and the state of the economy.

Impact on Mortgage Affordability

Rising mortgage interest rates will make mortgages more expensive, and this will have an impact on mortgage affordability. Borrowers may need to consider taking out a mortgage with a longer fixed-term to protect themselves against future interest rate rises. However, longer fixed-term mortgages often come with higher interest rates, which may not be affordable for all borrowers.

In addition, the rising cost of mortgages may make it more difficult for first-time buyers to get on the property ladder. With higher monthly mortgage payments, borrowers may find it more difficult to save for a deposit, making it harder to purchase a home.

UK mortgage interest rates are expected to rise in 2023, as the economy continues to recover from the pandemic. While rising interest rates are likely to lead to an increase in mortgage interest rates, the rate of increase will depend on a range of factors. Borrowers need to carefully consider their options when it comes to taking out a mortgage in 2023, taking into account their affordability and the risks of interest rate rises.


Bank of England. (2022). Monetary policy summary and minutes of the Monetary Policy Committee meeting. Retrieved from https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2022/november-2022

The information contained within was correct at the time of publication but is subject to change.