Average mortgage rates have decreased to their lowest level since June last year as lenders continue to lower rates, a report has said.
According to Moneyfacts, average two-year fixed mortgage rates stand at 5.83% and the average rate for a five-year fixed rate is 5.43%.
The last time they were at current levels was 9 June 2023, when a two-year fixed stood at 5.83% and the average five-year fixed rate was 5.44% on 6 June 2023.
Moneyfacts said that there are currently 5,924 residential mortgage products available, which is an increase from 5,923 products on the previous working day.
The average two-year buy-to-let residential mortgage rate is priced at 5.87%, down from an average rate of 5.89% on the previous working day.
The average five-year buy-to-let residential mortgage rate stands at 5.84%. This is a fall from an average rate of 5.86% on the previous working day.
There are currently 2,939 buy-to-let mortgage products available, up from 2,937 products on the previous working day.
The average two-year tracker rate is 6.15%, which is unchanged from the previous working day.
The average standard variable rate as of 1 January 2024 is 8.18%.
With the start of the new year, several lenders, including HSBC, Halifax and Natwest, have lowered rates. This has led many to speculate that this has accelerated the mortgage price war, with further cuts expected.
Five-year fixed mortgage rates fall below 5%
Rightmove figures show that the average five-year fixed rate is 4.96%, the first time it has fallen below 5% since June 2023 and a decrease from 5.16% a year ago.
The average two-year fixed mortgage rate is 5.29%, down from 5.42% a year ago.
The report added that the average 85% loan to value (LTV) five-year fixed mortgage rate is 5.06%, down from 5.15% a year ago.
Rightmove noted that the average 60%LTV five-year fixed mortgage rate is 4.36%, a decrease from 4.81% this time last year.
The average monthly mortgage payment on a typical first-time buyer type property when taking out an average five-year fixed, 85% LTV mortgage, is £1,100 per month, a fall from £1,118 per month a year ago.
Matt Smith, Rightmove’s mortgage expert, said: “Rate cuts are gathering pace, as lenders jostle for position at the start of the year. This can only be good news for those looking to move home and those whose fixed deal comes to an end soon.”
