According to Rightmove figures, average mortgage prices continued on their downward trajectory with lenders likely to add further price drops in the near future.
Rightmove’s mortgage expert Matt Smith said: “This is the sixth consecutive week we’ve seen average mortgage rates drop, and with some of the bigger lenders signalling their intention to announce further rate drops in the coming days, this will be a confidence booster for those looking to take out a mortgage soon.
“Over this six-week period we’ve seen average five-year fixed mortgages fall by 0.42 per cent, while two-year fixed rates are down by 0.33 per cent.”
Rates falling, but still up on last year
The average five-year fixed mortgage rate is now 5.69 per cent. While this is down on recent figures, it is up from 4.02 per cent a year ago. The average two-year fixed mortgage rate is priced at 6.28 per cent, an increase from 4.02 per cent a year ago.
At 60 per cent loan to value (LTV), the average two-year fixed rate is 5.96 per cent and the lowest rate is 5.75 per cent. The average five-year fixed rate is 5.33 per cent and the lowest rate is 5.09 per cent.
Within the 75 per cent LTV tier, the average two-year fixed rate is 6.12 per cent, with the lowest rate coming to 5.81 per cent and the average five-year fixed rate is 5.52 per cent and the lowest rate is 5.09 per cent.
At 85 per cent LTV, the average two-year fixed rate is 6.32 per cent and the lowest rate is priced at 5.99 per cent. The average five-year fixed rate comes to 5.73 per cent and the lowest rate is pegged at 5.24 per cent.
Higher tier pricing
Within the higher LTV tiers, the average two-year fixed rate at 90 per cent LTV is 6.48 per cent and the lowest rate is 6.18 per cent. The average five-year fixed rate is 5.86 per cent and the lowest rate is 5.4 per cent.
At 95 per cent LTV, the average two-year fixed rate is 6.61 per cent and the lowest rate is 6.24 per cent. The average five-year fixed rate is 6.03 per cent and the lowest rate is 5.75 per cent.
The average monthly mortgage payment on a typical first-time buyer type property when taking out an average five-year fixed, 85 per cent LTV mortgage, is £1,193 per month, up from £1,002 per month a year ago.
Rightmove’s Smith highlighted that greater stability in the market was likely to push lenders into more rate cuts which could only help brokers, home movers and first-time buyers alike.
He said: “More stability in the mortgage market after a topsy-turvy few months earlier in the year is a good thing for home movers, particularly as it means we are seeing lenders continuing to actively compete for business.”