Sunday, February 25, 2024
Finance

Mortgage rates see biggest monthly drop since December 2022

mortgage rates

Across all deposit sizes, the average two-year fixed-rate mortgage had a rate of 5.56% at the start of February 2024, down from 5.93% at the start of January this year

The average two-year fixed mortgage rate available to UK borrowers has dropped at the fastest monthly rate since the end of 2022, according to new data.

Moneyfacts reported that the average two-year fixed mortgage rate dropped “significantly” in January, by 0.37%, its biggest monthly decline since December 2022.

Across all deposit sizes, the average two-year fixed-rate mortgage had a rate of 5.56% at the start of February 2024, down from 5.93% at the start of January this year.

Five-year fixed mortgage rates edged lower from 5.55% to 5.18% on average, comparing the start of January 2024 with the start of February this year.

Rachel Springall, a finance expert at Moneyfacts, said: Borrowers searching for a new mortgage deal may be delighted to know fixed mortgage rates continued their downward trend, with the average two-year fixed rate declining by its biggest margin since December 2022.

Those borrowers who have waited patiently in recent months to re-finance, or indeed are preparing for when their mortgage deal expires, would be wise to review rates, as lenders are closely monitoring the volatile swap rate market, which tends to influence fixed-rate pricing, Springall said.

She added: There have been big expectations for fixed rates to drop further, and whether now is the right time to refinance will come down to an individual’s circumstances.

Lenders are in constant review of their ranges, and it is likely rates will fluctuate in the coming weeks due to the noises surrounding future rate expectations, she said.

She also mentioned that mortgage rates have dropped for FTBs. The average two-year fixed-rate mortgage at 95% LTV has dropped below 6% for the first time since May 2023 (sitting at 5.84% at the start of February), much lower than six months ago, when it was just over 7%.

In February, Moneyfacts recorded 5,787 mortgage products on the market, which was marginally lower than the 5,899 available in January. This was the first monthly decline since July last year.

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