The average five-year fixed mortgage rate has dropped below 6% for the first time in seven weeks, said Moneyfacts.

The financial information provider said that the average five-year fixed mortgage rate is now 5.95%, after peaking at 6.51% a month ago.

However it’s still far higher than the 4.33% average on 1st September, before the ill-fated mini-Budget. And way above the 2.59% recorded a year ago.

Short-term fixes

Two-year fixed rates have followed a similar pattern.

On 1st September the average two-year fix was 4.24%. It peaked at 6.65% on 20th October but has now fallen back to 6.13%.

A year ago it was just 2.29%.

Rachel Springall, finance expert at Moneyfacts.co.uk, said: “Borrowers may well breathe a sigh of relief to see that fixed mortgage rates are starting to fall, but there may be much more room for improvement.

“As the average five-year fixed mortgage rate falls below 6% for the first time in seven weeks, borrowers who paused their home ownership plans, or indeed parked the idea of refinancing, may now be tempted to scrutinise the latest deals on offer.

“However, it is worth noting that rates could fall further still, but there is no clear answer as to how quickly that may be. Indeed, it’s been around two months since both the average two and five-year fixed mortgage rate breached 5% (30 September 2022), but today only a handful of lenders are offering sub-5% fixed deals.

“Borrowers may feel they have to be patient for a little while longer yet before they commit to a new fixed mortgage, or even wait until next year to see how the market recovers from the recent interest rate uncertainty.”