You are here: Home - Mortgages - First Time Buyer - News -

Borrowers urged to lock in deals as mortgage rates continue to fall

Written by:
Mortgage borrowers are being urged to lock into a new deal now as rates continue to fall amid talks of a potential base rate rise.

Data from Moneyfacts shows the rate on the average two-year fixed mortgage deal is now 2.25 per cent, down from 2.38 per cent in September.

Meanwhile, the average five-year fixed mortgage rate has fallen from 2.63 per cent last month to 2.55 per cent.

Eleanor Williams, finance expert at Moneyfacts, said: “As living costs are on the increase, it is good news that mortgage rates have continued to reduce.

“The average overall two- and five-year fixed rates are the lowest they have been in 13 months, fuelled by falls in the average rates across the majority of the loan-to-value (LTV) tiers.

“Borrowers now have the chance to secure lower rates than were on offer a year ago when the sector was being rocked by the pandemic.”

In further good news, competition is hotting up for all borrowers, not just those with the most equity or largest deposits.

The most dramatic month-on-month average rate cuts were for 90 per cent and 95 per cent loan-to-value deals, where the two-year fixed rates dropped by 0.29 per cent and 0.25 per cent to 2.56 per cent and 3.32 per cent respectively, according to Moneyfacts.

Over the weekend, a key bank of England policymaker hinted of a Bank of England base rate rise as early as this year.

Michael Saunders told the Sunday Telegraph: “I’m not in favour of using code words or stating our intentions in advance of the meeting too precisely, the decisions get taken at the proper time.

“But markets have priced in over the last few months an earlier rise in Bank rate than previously and I think that’s appropriate.”

An increase to the base rate would push up costs for millions of borrowers on variable mortgages.


There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

It’s time to get your finances in shape, and moving your cash savings to a higher paying deal is a good plac...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

The experts’ guide to sorting out your personal finances in 2021

From opting to ‘low spend’ months to imposing your own ‘cooling-off period’, industry experts reveal t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week