Wednesday, February 28, 2024
Finance

Mortgage rates drop for a fifth successive month

Mortgage Advice Bureau

The overall average rates for two- and five-year fixed deals have dropped to 5.93% and 5.55%, respectively

Average rates across two- and five-year fixed mortgages dropped for a fifth successive month, and are now at their lowest in more than six months, according to market data provider Moneyfacts.

The overall average rates for two- and five-year fixed deals have dropped to 5.93% and 5.55%, respectively. The last time both rates were below 6% was in June 2023. Remarkably, the average two-year fixed rate is now 38 bps higher than its five-year counterpart.

The ‘revert to’ rate or standard variable rate (SVR) has seen a slight drop of 1 bps, settling at 8.18%, while the average two-year tracker variable mortgage rate has also dropped month-on-month, now at 6.15%.

The latest Moneyfacts UK Mortgage Trends Treasury Report also disclosed a sixth successive rise in the number of mortgage products available, reaching an impressive 5,899 options — the highest level in more than 15 years. The last time there were more deals available was in March 2008, when there were 6,192 available products.

Noteworthy is the jump in deals at the 95% LTV tier, reaching 270, the highest level since September 2022.

Moreover, the average shelf-life of a mortgage product has extended to 21 days, marking the highest figure since June 2023.

The successive reductions to the overall average two- and five-year fixed mortgage rates will be of great relief for borrowers looking to refinance this year, Rachel Springall, finance expert at Moneyfacts, said. The volatility surrounding mortgage rate pricing eased, as the average mortgage shelf life increased from 17 days to 21 days, the highest figure logged in more than six months.

Springall said: There are big expectations for fixed mortgage rates to drop in the coming weeks, so some borrowers may choose to wait patiently for the right time to change their deal or buy their first home. Those comparing different mortgage offers may be pleased to see a big uplift in choice, as there was an increase of 200 residential mortgages month-on-month.

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