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Mortgage rates see first weekly drop since April

Nick Cheek
Written By:
Nick Cheek
Posted:
Updated:
02/08/2023

Average mortgage two and five-year rates fell for the first time week-on-week since the middle of April, data from a property portal has found.

The Rightmove weekly mortgage tracker showed that declines were recorded at all loan to value (LTV) tiers since 25 July. Last week, the firm suggested that the average increases could be reaching their peak. 

As of 31 July, the average five-year fixed rate at 60% LTV was 5.82% down 5.9%on 25 July, while the average two-year fixed rate fell from 6.38% to 6.3%. 

At 75% LTV, the average two-year fixed rate rose marginally from 6.46% to 6.47%. Meanwhile, its five-year fixed counterpart fell from 6% to 5.98%. 

The average rate for a two-year fixed mortgage at 85% LTV was 6.65%, down from 6.67% and the average five-year fixed rate was 6.15%, a drop from 6.18% last week. 

High LTV mortgage rates drop

Drops were also recorded across high LTV mortgage rates, with the average two-year fixed rate at 90% LTV coming to 6.77% and the average five-year fix sitting at 6.18%. These were both down from rates of 6.79% and 6.24% respectively. 

At 95% LTV, the average two-year fixed rate fell from 6.98% to 6.94%, while the average five-year fixed rate declined from 6.34% to 6.26%. 

Rightmove also calculated that the average monthly mortgage payment on a typical first-time buyer type property, on a five-year fixed mortgage at 85% LTV was now £1,253 per month, representing a £3 fall since last week. 

Matt Smith, mortgage expert at Rightmove, said: “Average rates across five-year and two-year fixed products have seen their first weekly drop since mid-April, as the more positive economic news in recent weeks begins to filter through to the mortgage market and lenders tentatively begin to reduce rates.  

“As previously seen, lenders are likely to be waiting for this week’s base rate announcement before any further action so they can act with a little more certainty – but without any market surprises, we expect rates to reduce further in the coming weeks and potentially accelerate depending on how positive the signs are.”