Fixed-rate mortgages have fallen to their lowest levels since May 2023, according to new data, which has shown borrowers are also benefiting from more product choice.
Mortgage customers signing up to new deals can expect a typical rate of 5.40% on a two-year fixed rate deal – this is 0.16% lower than a month ago, according to the data from Moneyfacts.
Meanwhile, the average five-year fixed rate is now 5.07% following a 0.13% fall in the last month.
Moneyfacts said fixed rates had fallen to their lowest level since Spring 2023. Borrowers deliberating between a two- or five-year fix will notice a typical 0.33% difference between the two when comparing rates as part of their assessment.
But it’s the fact there are more products available and these products are being offered on the market for longer which is showing the most promise.
Rachel Springall, finance expert at Moneyfacts, said: “Mortgage product choice bounced back after two months of falls, which is an encouraging sign for the market.
“Lenders continued to cut fixed mortgage rates but there was a much calmer rotation of products, as the average shelf-life of a mortgage remained at 21 days.
“These moves show the promising attitude of lenders to draw in new customers, which may be even more pressing as we edge closer to any of their end of year targets.”
The data comes just days after brokers warned borrowers the era of price cutting may be about to end as some lenders had begun to make rate hikes.
Springall echoed the advice given by these experts that anyone about to take out a mortgage should seek advice and be vigilant to price movements.
“Last month falling swap rates encouraged lenders to cut rates,” she said, “but a combination of the looming Budget, concerns over inflation and other global influences can result in market pricing uncertainty.
“However, there are still expectations for the Bank of England base rate to drop further before the year is over.”
She added: “All eyes will be on the pending Budget and the next base rate decision day for borrowers, but in the meantime, it would be wise for them to seek independent advice to explore the latest options.
“Lenders will no doubt be watching the markets closely, so they may react to changes suddenly. As a result, as we have seen in the past, some deals could be pulled as lenders try to assess their current margins.”
