Average mortgage rates have fallen for the first time in months.
Both two and five-year fixed-rate deals have dropped, according to data from financial information company Moneyfacts.
The average rate on a two-year fixed deal is now 6.79%, down from 6.81% on Wednesday, while the average five-year rate dipped to 6.31%, a decrease from 6.33% on the day before. The majority of UK mortgage holders are on fixed rate deals.
More than 400,000 people were expected to move off existing fixed deals between July and September, meaning they are likely sign up to higher monthly mortgage bills.
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Not every average mortgage rate has decreased. The average two year tracker mortgage rate is the same as on Wednesday, 6.03%.
Behind the decrease is the surprise drop in the rate of inflation, which led to lower interest rate forecasts.
It's now expected that the Bank of England will need to do fewer base interest rate hikes to bring inflation to its 2% target.
Prior to the inflation announcement the Bank's base interest rate had been expected by some to exceed 6% but is now estimated to peak at 5.75%.
The lower expected rate is now being priced in by mortgage lenders.
Overall, the mortgage bills for anyone who has recently agreed a new fixed rate are still up markedly from the years of ultra low interest rates. Less than two years ago, in October 2021, the average rate on a five year deal was just 2.55%.
More than 2.4 million fixed-rate deals were set to expire from summer to the end of 2024, the banking industry trade body, UK Finance, said.
https://news.google.com/rss/articles/CBMiXGh0dHBzOi8vbmV3cy5za3kuY29tL3N0b3J5L2F2ZXJhZ2UtbW9ydGdhZ2UtcmF0ZXMtZmFsbC1mb3ItdGhlLWZpcnN0LXRpbWUtaW4tbW9udGhzLTEyOTI0MDQ50gFgaHR0cHM6Ly9uZXdzLnNreS5jb20vc3RvcnkvYW1wL2F2ZXJhZ2UtbW9ydGdhZ2UtcmF0ZXMtZmFsbC1mb3ItdGhlLWZpcnN0LXRpbWUtaW4tbW9udGhzLTEyOTI0MDQ5?oc=5
2023-07-20 08:48:45Z
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