Competition in mortgage market sees rates tumble
The average two-year fixed rate is now 2.55 per cent, its lowest since February, while the average five-year rate stands at 2.78 per cent, the lowest since April, according to data from Moneyfacts.
Despite being the largest monthly falls recorded for either rate since June 2020, they are considerably higher than their equivalent rates this time last year. Last July, the average two-year fix stood at 1.99 per cent, while the rate on a typical five-year fix was 2.25 per cent.
Meanwhile, the number of products available has reached its highest level in 16 months. There are currently 4,512 deals on the market an increase of 269 in the last month alone and the highest since March 2020. In contrast, there were just 2,728 products on offer in July 2020.
Availability increased across all individual loan-to-value (LTV) tiers, the first time this has happened since June 2018, according to Moneyfacts.
Borrowers with smaller deposits have seen the largest improvements in choice, particularly at 95 per cent LTV, where product numbers increased to 253 from 192 between June and July.
Eleanor Williams, finance expert at Moneyfacts, said: “According to the latest Halifax House Price Index, there was a 0.5 per cent drop in property prices, likely linked to the stamp duty holiday tapering off, but this in no way detracts from the fact that overall prices are up approximately 8.8 per cent on a yearly basis.
“Demand for the very limited supply of property could remain high, as the appetite to either get onto the property ladder or for larger properties with home offices and outdoor space continues, and these borrowers could be enticed by the possible savings lower mortgage rates may bring them.”