Fixed mortgage rates have reached their lowest levels in six months, a report from Moneyfacts has revealed.
The report, Moneyfacts UK Mortgage Trends Treasury Report, found that the average two and five-year fixed rates have fallen to their lowest level since June 2023.
It explained that two-year fixed rates for all loan-to-values fell from 6.04 per cent while five-year fixed rates fell to 5.65 per cent.
Moneyfacts finance expert, Rachel Springall, said: “Fixed mortgage rates have continued to drop across all LTVs, month-on-month, on two and five-year fixed terms.”
Springall stated that these drops will come as “good news” to borrowers across the spectrum, including first-time buyers.
“Those borrowers with small deposits will find that average rates are now down considerably from just a few months ago,” she explained.
“This could improve the potential for mortgage affordability of would-be buyers or those looking to remortgage with limited equity.”
It was also found that the average two-year fixed rate stands at 0.39 percentage points higher than the average five-year equivalent, a narrower gap than the 0.43 percentage point difference last month.
Products
Meanwhile, product choice overall was found to have risen month-on-month for a fifth consecutive month, rising to 5,694 options.
This represented the highest level of availability in 15 years as the last time there were more deals available was March 2008 when there were 6,129 products.
Additionally, the average shelf-life of a mortgage product fell to 17 days which is, according to Moneyfacts, a sign of lenders “vigorously” repricing as the year end approaches.
Springall stated: “The choice of mortgage deals continued to rise-on-month, including deals for borrowers with a smaller deposit or equity.
“Mortgages in the 90 per cent LTV sector are in abundance, now with over 700 deals for borrowers to choose from, it is the highest count seen on our records in over a year.
“This is promising as just one year ago there were less than 500 deals.
“Those borrowers who can only stretch their deposit to 5 per cent will find over 250 deals to choose from, compared to just 144 deals a year ago.”
However, Springall also stated that it would be “encouraging” to see “more appetite” from lenders within the 95 per cent LTV sector moving into 2024.
tom.dunstan@ft.com
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