The overall average two and five-year fixed rates dropped between the beginning of November and the beginning of December, to 6.04 per cent and 5.65 per cent respectively, now at their lowest levels since June 2023
Average two and five-year fixed rates across all loan-to-value tiers have dropped for a fourth successive month and now sit at a six-month low, shows the latest data from Moneyfacts.
The overall average two and five-year fixed rates dropped between the beginning of November and the beginning of December, to 6.04 per cent and 5.65 per cent respectively, now at their lowest levels since June 2023. The average two-year fixed rate sits 0.39 per cent higher than the average five-year equivalent, a narrower gap compared to the 0.43 per cent difference last month.
The average SVR remained unchanged but, at 8.19 per cent, is the highest level on Moneyfacts’ electronic records (starting July 2007).
The average two-year tracker variable mortgage rate increased MoM to sit at 6.16 per cent.
Product choice overall increased MoM, for a fifth successive month, to 5,694 options, the highest level of availability in more than 15 years.
The average shelf-life of a mortgage product dropped to 17 days, a sign of lenders repricing as the year end nears.
Rachel Springall, finance expert at Moneyfacts, said: Fixed mortgage rates have continued to drop across all LTVs, month-on-month, on two and five-year fixed terms. These drops will come as good news to borrowers across the spectrum, including FTBs. Those borrowers with small deposits will find that average rates are now significantly lower from just a few months ago, with the average two-year fixed rate at 90 per cent and 95 per cent LTV resting at 6.01 per cent and 6.34 per cent respectively, down from 6.81 per cent and 7.10 per cent in August 2023, which was the highest monthly point in 2023. This could improve the potential mortgage affordability of potential buyers or those looking to remortgage with limited equity.
Springall added: The choice of mortgage deals continued to increase month-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 more than 700 deals for borrowers to choose from, it is the highest count seen on our records in more than a year (February 2022 – 735). This is promising as just one year ago there were less than 500 deals (December 2022 – 457). Those borrowers who can only stretch their deposit to 5 per cent will find more than 250 deals to choose from, compared to just 144 deals a year ago. It would be encouraging to see more appetite from lenders within the 95 per cent LTV sector moving into 2024, especially as the Mortgage Guarantee Scheme has been extended to the end of June 2025.