The average five-year fixed mortgage rate falls below 6% for the first time since September

The average five-year fixed mortgage rate falls below 6% for the first time in nearly two months as lenders cut rates since the October peak

  • The average five-year fixed interest rate is now 5.95%, compared to 6.32% on November 1
  • The two-year fixed average is 6.13%, up from 6.47% at the beginning of the month
  • Lenders including Santander have been slowly lowering mortgage rates
  • Nationwide reduces its fixed rates by up to 0.3% tomorrow (Wednesday 23)
  • In October the five-year fixed rate reached a maximum of 6.61%, the highest since September 2008 when it reached 6.62%

Interest on the average five-year fixed mortgage has fallen below 6 percent to 5.95 percent for the first time in seven weeks as more lenders cut their rates.

Two-year fixed-rate offers are now averaging 6.13 percent, according to Moneyfacts.

These are down from 6.32 percent for a five-year solution and 6.47 percent for a two-year solution on November 1.

The drop in the five-year average will save borrowers £43 on their monthly payments on a £200,000 mortgage, compared to what they locked in at the beginning of the month. For a two-year fixed deal, the saving is £42.

Gradual drop: The five-year average fixed-rate mortgage rate has fallen below 6% for the first time in seven weeks

Mortgage rates soared after then-foreign minister Kwasi Kwarteng’s ill-fated mini-budget. UK borrowing costs rose as investors sold their UK government bonds, known as gilts, before the Bank of England announced a £65bn bond-buying program to prop up the market.

The two-year average fixed rate jumped from 4.74 percent on September 23 (budget day) to 5.17 percent a week later on September 30.

On October 20, the two-year and five-year fixed prices reached highs of 6.65% and 6.61%, respectively.

The last time the average two-year fixed-rate mortgage was 6.65 percent or higher was in August 2008 at 6.94 percent. The last time the average five-year fixed-rate mortgage was 6.51 percent or higher was in September 2008 at 6.52 percent.

However, there is some good news as rates are slowly starting to fall. Last week, the average cost of two-year fixed-rate transactions across all loan-to-value tranches fell every day, according to Moneyfacts.

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

“As the average five-year fixed mortgage rate falls below 6 percent for the first time in seven weeks, borrowers who have put their homeownership plans on hold, or indeed put the idea of ​​refinancing on hold, can now see tempted to peruse the latest deals on sale. .

‘However, it is worth noting that rates could fall further, but there is no clear answer as to how quickly that can be. Today, only a handful of lenders offer fixed offers below 5 percent. Borrowers may feel they have to be patient a little longer before committing to a new fixed mortgage, or even wait until next year to see how the market recovers from recent interest rate uncertainty.’

Mortgage rates have started to fall after rising sharply last month following the mini-Budget

Mortgage rates have started to fall after rising sharply last month following the mini-Budget

This week, Santander announced that it would reduce all its residential mortgage rates by up to 0.45 percent. All residential tracker fees have also been cut by as much as 1.25 percent, the lender said in a note to brokers.

In addition, Nationwide is cutting rates on its two-, three-, and five-year fixed offers by as much as 0.3 percent. For new customers moving house, the lender’s two-year flat rate of 75 per cent will be reduced by 0.25 per cent to 5.39 per cent, with a fee of £999.

And for first-time buyers, a five-year flat rate at 90 per cent LTV will drop by 0.15 per cent to 5.29 per cent, with a fee of £999. Its two-year LTV tracker rate The 85 percent rate has also been reduced, from 0.3 percent to 3.94 percent, with a fee of £999.

Natalie Hines, founder of Sutton Coldfield-based broker Premier One Mortgages, said: “We’re already starting to see five-year and two-year fixed rates come down and I’m sure we’ll see other lenders do the same in the coming weeks. “. .

“I think we can expect to see more increases in the base rate, but eventually it will settle somewhere between 3 and 4 percent.

“With swap rates now stabilizing, it’s likely that the average fixed rate 18 months from now won’t be much different from where we are now.”

What to do if you need a mortgage

Borrowers who need to find a mortgage because their current fixed-rate agreement is coming to an end, or because they have agreed to purchase a home, have been urged to act but not panic..

Banks and building societies continue to lend and mortgages are still being offered and applications accepted.

However, rates are changing rapidly and there is no guarantee that the deals will last and not be replaced by mortgages that charge higher rates.

This is the best Money Mortgage Rate Calculator powered by L&C that can show you offers that match the value of your mortgage and property

What if I need to re-mortgage?

Borrowers should shop around and talk to a mortgage broker and be prepared to act to secure a rate.

Anyone with a fixed-rate agreement ending within the next six to nine months should consider how much it would cost to remortgage now and consider closing a new agreement.

Most mortgage deals allow fees to be added to the loan and are then only charged when you withdraw. By doing this, borrowers can lock in a rate without paying expensive setup fees.

What if I am buying a house?

Those with agreed home purchases should also aim to lock in rates as soon as possible, so they know exactly what their monthly payments will be.

Homebuyers should be careful not to overstretch themselves and be prepared for the possibility of house prices falling from their current high levels, due to higher mortgage rates limiting people’s borrowing capacity.

How to Compare Mortgage Costs

The best way to compare mortgage costs and find the deal that’s right for you is to talk to a good broker.

You can use our best mortgage rate calculator to display offers that match your home value, mortgage size, term, and fixed rate needs.

Keep in mind, however, that rates can change quickly, so the advice is if you need a mortgage, compare rates and then speak to a broker as soon as possible, so they can help you find the right mortgage for you. .

> Consult the best fixed-rate mortgages that you could apply for