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Average two-year fixed mortgage rate drops below 5%

Average two-year fixed mortgage rate drops below 5%
Shekina Tuahene
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Shekina Tuahene

The average two-year fixed mortgage rate has fallen to 4.99%, down from 5.12% a year ago, data from Rightmove showed.

According to data from property portal Rightmove, the average five-year fixed rate was 4.66%, as of yesterday, which was lower than a year ago when it was 4.81%. 

The lowest available mortgage rates according to Rightmove’s analysis were 3.88% for a five-year fixed deal at 60% loan to value (LTV) or 4.17% for a two-year fix. 

The average rates at this tier were 4.15% and 4.43% respectively. 

At 75% LTV, the average rates came to 4.78% for a two-year fix and 4.55% for a five-year fix. 

Respectively, average pricing was 4.98% and 4.61% at 85% LTV. 

Sub-5% mortgage rates were also available for borrowers with a smaller deposit, as the average came to 4.82% for a five-year fix at 90% LTV. This rose to 5.25% for a two-year fix. 

At 95% LTV, average mortgage rates reached 5.64% for a two-year fix and 5.23% for a five-year fix. 

Falling mortgage payments 

Rightmove also calculated that the average mortgage payment for a typical first-time buyer had also fallen. 

As of yesterday, this came to £1,063 a month on a 85% LTV mortgage of 25 years for a property worth £222,473, compared to £1,086 a year ago. 

Matt Smith, Rightmove’s mortgage expert said: “We’ve had the busiest month for people getting a mortgage in principle since we launched the service in 2022, which shows that many future movers want to understand what they are likely to be able to borrow from a lender if taking out a mortgage soon. 

“Average mortgage rates continue to trickle down on the whole, however we’re now seeing those with smaller deposits benefit the most, whereas those who need to borrow less have seen some small increases in rates due swap rate trends.”