Moneyfacts UK Mortgage Trends Treasury Report data reveals fixed mortgage rates have decreased across the spectrum and the average shelf-life of a mortgage increased month-on-month
Average mortgage rates dropped for the second successive month in August this year, according to the latest Moneyfacts UK Mortgage Trends Treasury Report.
For two-year deals, the average rate dropped 0.21% to 5.56% – its lowest level since February this year. Borrowers looking for a longer-term fix will benefit from five-year fixed rates declined by 0.18% to 5.20%, the lowest since March. Two-year fixed rates have now been higher than their five-year counterparts since October 2022.
The average SVR also declined in August, now standing at 7.99%. The number of products available for borrowers also dropped marginally month-on-month, with 6,523 options.
Moneyfacts UK Mortgage Trends Treasury Report data reveals fixed mortgage rates have decreased across the spectrum and the average shelf-life of a mortgage increased month-on-month.
Rachel Springall, Finance Expert at Moneyfacts, said: Fixed mortgage rates dropped across the spectrum during August, which will be welcome news for prospective borrowers. Overall, the average two- and five-year fixed rates have now declined for the second month running and are back down to levels not seen for more than six months.
It can take a few weeks for lenders to react to a volatile swap rate market, so it is good to see mortgage pricing moving in a positive direction. A sense of product stability also returned to the market, as the average shelf-life of a deal increased to 21 days, up from 17 days in August, Springall said.
This month marks two years since the fiscal announcement took place, and subsequent unsettled times saw significant hikes to mortgage rates. At the start of September 2022, the average two-year fixed mortgage rate stood at 4.24%; a year later it was 6.70%. Fixed mortgage rates are now much lower than they were this time last year, but it remains the case that the average five-year average rate is lower than its two-year counterpart, which has been the case since October 2022.
The start of August also brought the first BoE base rate cut in more than four years, which has led to cuts in both the average two-year tracker rate and average Standard Variable Rate (SVR), but fixed rates remain lower on average.