Fixed mortgage rates fall to six-month low – Moneyfacts

Rates drop for a fourth consecutive month

Fixed mortgage rates fall to six-month low – Moneyfacts

The average two- and five-year fixed rates both fell between the beginning of November and the start of this month and are now at their lowest levels since June 2023, according to financial information company Moneyfacts.

The latest Moneyfacts UK Mortgage Trends Treasury Report data has revealed that consistent downward trend in average fixed mortgage rates across all loan-to-value tiers for both two- and five-year fixed mortgages, with rates at 6.04% and 5.65%, respectively.

Notably, the average two-year fixed rate is now only 0.39% higher than its five-year counterpart, showcasing a narrower gap compared to the 0.43% difference recorded last month.

The drop in average fixed rates marks the fourth consecutive month of decline, bringing the overall average rates to a six-month low.

The ‘revert to’ rate or standard variable rate (SVR) has remained unchanged at 8.19% – the highest recorded in Moneyfacts’ electronic records since July 2007.

Month-on-month, the average two-year tracker variable mortgage rate saw a slight increase, reaching 6.16%.

Fixed mortgage rates have continued to drop across all loan-to-values, month-on-month, on two- and five-year fixed terms,” commented Rachel Springall, finance expert at Moneyfacts. “These falls will come as good news to borrowers across the spectrum, including first-time buyers.

“Those borrowers with small deposits will find that average rates are now down considerably from just a few months ago, with the average two-year fixed rate at 90% and 95% LTV resting at 6.01% and 6.34% respectively, down from 6.81% and 7.10% in August 2023, which was the highest monthly point in 2023. This could improve the potential mortgage affordability of would-be buyers or those looking to remortgage with limited equity.”

Meanwhile, product choice demonstrated a consistent upward trajectory for the fifth consecutive month, offering 5,694 options — the highest availability in over 15 years.

According to Moneyfacts, the average shelf-life of a mortgage product fell to 17 days, a sign of lenders vigorously repricing as the yearend approaches.

“The choice of mortgage deals continued to rise month-on-month, including deals for borrowers with a smaller deposit or equity. Mortgages in the 90% LTV sector are in abundance, now with over 700 deals for borrowers to choose from, it is the highest count seen on our records in over a year,” Springall said.

“It would be encouraging to see more appetite from lenders within the 95% LTV sector moving into 2024, particularly as the Mortgage Guarantee Scheme has been extended to the end of June 2025.

“Lenders will no doubt be working hard to meet their end-of-year targets right now, indeed the average shelf life of a mortgage has fallen to 17 days, down from 20 days, so hopefully, such vigorous repricing will result in better deals for borrowers desperate to refinance.”

Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, Twitter, and LinkedIn.