By comparison, the average five-year fixed rate as of 20 October was 6.51 per cent. The rate has steadily dropped in the last few weeks and according to Moneyfacts, was pegged at 6.32 per cent on 1 November.
Two-year fixes have also decreased but more mildly. This is likely due to two-year fixed mortgage pricing being more closely-linked to swap rate movements.
The average two-year fixed rate is now 6.13 per cent, lower than the 6.47 per cent average recorded on 1 November. This is also down on where it was on 20 October, when it was pegged at 6.65 per cent. On 1 October, two-year fixes had an average rate of 5.43 per cent and five-year fixes were at 5.23 per cent.
Rates are still higher than they were for the majority of this year when many were below five per cent.
On 1 September before the mini Budget caused market uncertainty, two-year fixed rates sat at 4.24 per cent on average while five-year fixes were 4.33 per cent. On 23 September, the day of the mini Budget, these rates were 4.74 per cent and 4.75 per cent respectively.
No guarantee for fast falling rates
Rachel Springall, finance spokesperson at Moneyfacts.co.uk, said: “Borrowers may well breathe a sigh of relief to see that fixed mortgage rates are starting to fall, but there may be much more room for improvement. As the average five-year fixed mortgage rate falls below six per cent for the first time in seven weeks, borrowers who paused their homeownership plans, or indeed parked the idea of refinancing, may now be tempted to scrutinise the latest deals on offer.
“After the fiscal announcement on 23 September, the average two and five-year fixed mortgage rates rose sharply, but they are edging further away from their daily peak.”
Springall said rates could fall further but there was no indication as to how quickly that would happen.
She added: “It’s been around two months since both the average two and five-year fixed mortgage rate breached five per cent, but today only a handful of lenders are offering sub-five per cent fixed deals.
“Borrowers may feel they have to be patient for a little while longer yet before they commit to a new fixed mortgage, or even wait until next year to see how the market recovers from the recent interest rate uncertainty.”
