The Rightmove weekly mortgage tracker revealed that from 19 to 26 June, the average two-year fixed mortgage rate had dropped from 5.44% to 5.42%, while the average five-year fixed mortgage rate fell from 5.03% to 5.02%. 

Rates are also lower than they were last year, when they averaged 5.99% and 5.57% respectively. 

Last week, following the news that inflation had fallen to the 2% target, Rightmove predicted that mortgage rates would start to come down. 

Matt Smith, mortgage expert at Rightmove, said: “Mortgage rates this week have slightly reduced compared to last week, as lenders are starting to respond to recent positive news about the UK economy and the prospect of the first base rate reduction later in the summer.

“As we’ve seen some high-profile rate cuts from high street lenders this week, with others likely to follow suit, we expect average rates to reduce further over the next couple of weeks.” 

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Natwest, Barclays and HSBC have been among some of the high street lenders to price their mortgages downwards in the last two weeks. 

Smith added: “This will be welcome news for homebuyers and timed well for any post-election bounce in activity.” 

 

Lower mortgage rates across most LTV tiers

At 60% loan to value (LTV), the average two-year fixed mortgage rate was 4.84% as of 26 June, down from last week’s 4.88%. The average five-year fixed rate fell from 4.47% to 4.42%. 

Last year, average rates sat at 5.75% and 5.35% respectively. 

The average two-year fixed rate for a deal at 75% LTV came to 5.25% this week, while the average five-year fixed rate was 4.88%. This compared to respective averages of 5.29% and 4.89% last week, and 5.83% and 5.44% a year ago. 

At 85% LTV, the average two-year fixed rate fell from 5.43% to 5.42% and the average five-year fixed rate was flat at 5.01%. Again, these were lower than averages of 5.98% and 5.58% in 2023. 

The average two-year fixed rate at 90% LTV came to 5.68% as of 26 June, which was unchanged from a week ago. The average five-year fixed rate was also flat at 5.19%. 

Both average rates were lower than their respective pricing of 6.14% and 5.72% last year. 

As of today, the average two-year fixed rate at 95% LTV was 6.12%, slightly higher than last week’s 6.1%. The average five-year fixed rate was 5.74%, compared to 5.72% a week ago. 

While average rates were higher week-on-week at this tier, they were down from the previous year’s respective rates of 6.52% and 5.92%. 

Rightmove calculated that the average monthly mortgage payment on a first-time buyer-type home worth £227,757 would be £1,133 on a five-year fix at 85% LTV paid over 25 years. 

This was higher than the average monthly payment of £1,191 last year, when the average asking price for a first-time buyer home was £226,412.