Borrowers urged to strike deals as mortgage rates continue to fall
Mortgage borrowers are urged to strike a new deal now as rates continue to fall amid talks about a possible base rate hike.
Data from Moneyfacts shows that the average two-year fixed-rate mortgage rate is now 2.25%, down from 2.38% in September.
Meanwhile, the five-year average fixed mortgage rate fell from 2.63 percent last month to 2.55 percent.
Eleanor Williams, Financial Expert at Moneyfacts, said: “As the cost of living increases, it is good news that mortgage rates have continued to fall.
“The two- and five-year average fixed rates are the lowest in 13 months, fueled by lower average rates on the majority of loan-to-value (LTV) levels.
“Borrowers now have the option of obtaining lower rates than those offered a year ago when the industry was rocked by the pandemic.”
The good news is that competition is increasing for all borrowers, not just those with the most equity or the largest deposits.
The most dramatic month-to-month average rate cuts were in 90% and 95% of loan-to-value transactions, where two-year fixed rates fell 0.29% and 0.25% to 2.56% and 3.32%. hundred respectively, according to Moneyfacts.
Over the weekend, a key Bank of England politician hinted at a Bank of England base rate hike as early as this year.
Michael Saunders told the Sunday Telegraph: “I am not in favor of using code words or being too specific about our intentions before the meeting, decisions are made at the right time.
“But the markets have incorporated in the last few months a hike in the bank rate earlier than before and I think that’s appropriate.”
An increase in the base rate would drive up costs for millions of borrowers on variable mortgages.