The Rightmove weekly mortgage tracker found this was the case across most loan-to-value (LTV) brackets.
As of 5 June, the overall average two-year fixed mortgage rate came to 5.42%, down from 5.47% in 2023. Meanwhile, the average five-year fixed rate was 5.04%, compared to 5.11% last year.
At 60% LTV, the average two-year fixed rate came to 4.89%, compared to 5.2% last year. The average five-year fixed rate was down from 4.81% to 4.48%.
For a two-year fix at 75% LTV, the average rate was 5.28%, down from 5.32% last year. The average five-year fixed mortgage rate at this tier was 4.92%, compared to 4.95% in 2023.
At 85% LTV, the average two-year fixed rate was 5.41%, while the average five-year fixed rate came to 5.02%. These were both lower than the averages of 5.48% and 5.1% last year respectively.
For a two-year fixed mortgage at 90% LTV, the average rate was 5.62%. This was higher versus the previous year’s average of 5.59%. Over the same period, the average five-year fixed rate fell from 5.28% to 5.18%.
At 95% LTV, the average two-year fixed rate was 6.08%, down from 6.19% in 2023, and 5.68% for a five-year fix, which was higher than the average of 5.61% a year ago.
Overall, average mortgage rates were also relatively unchanged from last week.
The average monthly mortgage payment on a typical first-time buyer property with a five-year fix at 85% LTV was calculated at £1,135 per month, marginally down from £1,136 a year ago.
Mortgage affordability in need of review
Matt Smith, mortgage expert at Rightmove, said with a general election coming up, the government should take the opportunity to reassess mortgage affordability criteria to help borrowers.
He said: “There’s an opportunity to unlock greater affordability in a responsible way, which could help more first-time buyers get on the ladder. First-time buyers are already taking out longer mortgage terms, and lender innovation has included the introduction of longer-term fixed rates that are likely to be part of the solution as they help by ensuring certainty of payments.
“Various mortgage schemes have played their part and supported a number of people, and we know from our research that people would like to see new schemes introduced, but we think longer-term solutions would be more effective than short-term schemes.”
He added: “Either way, it’s most likely that regulatory change is needed, so it’s critical that the government works with regulators and lenders from day one on any mortgage solutions, to ensure buy-in and take-up, which will in turn create more options for first-time buyers.”
