Typical five-year fixed mortgage deal now costs 5.95% per year, the lowest in seven weeks - Moneyfacts
Five-year fixed mortgage rates in UK drop below 6%
"Borrowers may well breathe a sigh of relief to see that fixed mortgage rates are starting to fall"
The average five-year fixed mortgage rate is below 6% for the first time in seven weeks, according to latest data from Moneyfacts.
Moneyfacts reports that the typical five-year fixed mortgage deal now costs 5.95% per year, the lowest in seven weeks.
The average five-year fixed rate increased from 4.33% on September 1st to reach 4.75% on September 23rd and 6.51% on October 20th. Since then it has fallen to 6.32% by November 1st and 5.95% as of today (Tuesday November 22nd).
The average two-year fixed rate remains over 6% at 6.13%. It was at a high of 6.65% on October 20th before dropping to 6.47% by November 1st.
Mortgage rates have been falling since Jeremy Hunt ripped up his predecessor Kwasi Kwarteng’s plans in mid-October. The Bank of England has also influenced rates by saying that market expectations of rises were too high.
Some mortgage brokers are forecasting that five-year fixed mortgage rates will fall back to below 4% in the New Year.
"May be much more room for improvement"
Rachel Springall, Finance Expert at Moneyfacts, said: “Borrowers may well breathe a sigh of relief to see that fixed mortgage rates are starting to fall, but there may be much more room for improvement. As the average five-year fixed mortgage rate falls below 6% for the first time in seven weeks (5 October 2022 – 5.97%), borrowers who paused their home ownership plans, or indeed parked the idea of refinancing, may now be tempted to scrutinise the latest deals on offer.
"After the fiscal announcement (23 September 2022) the average two- and five-year fixed mortgage rates rose sharply, but they are edging further away from their daily peak (20 October 2022).
"However, it is worth noting that rates could fall further still, but there is no clear answer as to how quickly that may be. Indeed, it’s been around two months since both the average two and five-year fixed mortgage rate breached 5% (30 September 2022), but today only a handful of lenders are offering sub-5% fixed deals. Borrowers may feel they have to be patient for a little while longer yet before they commit to a new fixed mortgage, or even wait until next year to see how the market recovers from the recent interest rate uncertainty.”
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