Average two-year fixed rates have fallen below six per cent at lower loan to value tiers, but higher LTV rates still remain elevated.
According to Coventry Building Society analysis, which looked at Bank of England figures, the average two-year fixed rate at 75 per cent loan to value (LTV) dropped 0.03 per cent last month to 5.97 per cent.
It comes after rates rose by a record 1.83 per cent in October due to financial market dislocation from the mini Budget.
The lender said it was the first monthly reduction since September last year, when average two-year fixed rate at 75 per cent LTV fell from 1.23 per cent to 1.2 per cent.
Beth Smith, mortgage product manager at Coventry Building Society, said that the market is “starting to recover” with fixed rates for those with at least a 25 per cent deposit were on the “right side of six per cent”.
She continued: “I don’t think anybody anticipated the sudden spike we saw in October, but the rates on lower LTV mortgages are coming down slowly and it’s likely that we’ll see a continued downward trajectory over time.”
Smith said that the “tide hasn’t yet turned for higher LTVs” and last month saw interest rate for two-fixed rates at 90 and 95 per cent LTV edge higher.
“Any drop in average rates is going to be welcome news for borrowers. And perhaps even those with smaller deposits will be less worried now that fixed rates for high LTVs aren’t rising at the same pace as October.
“But it’s likely to be a very long time before we see average fixed mortgage rates fall to last year’s levels again,” she noted.
Anna is currently the deputy editor for Mortgage Solutions and editor for Specialist Lending Solutions. She has worked as a journalist since 2019, having secured her Gold Standard NCTJ diploma from News Associates in a fast-track six-month course.
She started her career as a report at specialist publication The Insurance Insider covering a wide range of areas before joining Mortgage Solutions and Specialist Lending Solutions in 2021.
In her role, she helps put together and structure the news agenda for the day and writes up press releases, reports, interviews, analyses and exclusives across both titles. She also commissions blogs for Specialist Lending Solutions and hosts online masterclasses and in-person events across the business.
She has been shortlisted for three journalism awards, which include BIBA Journalist and Media Awards Scoop of Year Award in 2020, Headline Money Mortgage Journalist of the Year Award (B2B) in 2022 and 2023.
Prior to being a journalist, Anna worked in ecommerce across Snow + Rock, Cycle Surgery and Runners Need websites, and before that worked at specialist financial PR firm Rostrum.
In her spare time, Anna enjoys reading, seeing live music, and cooking for friends and family. When she gets a chance, she also enjoys hiking, skiing and indoor rock climbing.
