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.

Everything you wanted to know about ISAs…but were afraid to ask

The new tax year is less than a fortnight away and for ISA savers or investors, it’s hugely important. If yo...

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

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.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week