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Good news: The cost of fixed rate mortgages falls further
Fixed mortgage rates continue to move downwards, as product choice widens
The cost of fixed rate mortgages have dropped for the third month in a row, said Moneyfacts.
The financial information provider said that the overall two- and five-year fixed mortgage rates fell for a third consecutive month, to 5.44% and 5.20% respectively.
Five-year deals are now cheaper, with the difference of 0.24 percentage points between these two rates now the largest margin seen in almost 15 years.
More products on offer
There’s also been a rise in mortgage product choice, surpassing 4,000 options for the first time since August 2022, added Moneyfacts.
Product choice stands at 4,341 options, up from 3,643 in January 2023.
For borrowers with a large deposit of at least 40% of the property’s value, product choce has risen to 606, it’s highest level in three years.
The average shelf life of a mortgage product was also up, to 28 days – the joint highest since March 2022, a drastic change from 15 days seen a month ago.
Rachel Springall, finance expert at Moneyfacts, said: “The mortgage market has shown notable stability with product choice, as the total number of mortgage options has breached 4,000 for the first time since August 2022. Shelf life of mortgage deals has also stabilised to 28 days compared to 15 days seen a month ago. Lenders have gradually been cutting down their mortgage fixed pricing over this period, leading to the third consecutive month of falls to the average two- and five-year fixed rates.”
“Borrowers with a limited deposit may be pleased to see choice expand month-on-month and that both the two- and five-year average fixed rates at 95% loan-to-value sit below 6% for the first time since October 2022. On the other end of the spectrum, both choice and rates at 60% loan-to-value improved, following a rise of 122 to 606, availability within this tier is at its highest level in three years. These movements show that borrowers on both ends of these loan-to-value tiers could now find lower rates and more choice, but it would be understandable if they were to wait a bit longer for rates to come down.”
