Borrowers choosing a five-year fixed deal can now access an average rate of 5.30 per cent, down from 5.75 per cent a year ago.
Two-year fixes on average have fallen from 6.01 per cent to 5.74 per cent year on year.
Meanwhile, borrowers with the most amount of equity can choose from sub-5 per cent rates. At 60 per cent loan to value (LTV), the average five-year fixed rate deal is 4.78 per cent down from 5.40 per cent 12 months ago.
Matt Smith, Rightmove’s mortgage expert, said: “Lenders have accelerated mortgage rate reductions over the last week and this morning’s positive inflation news will only fuel confidence amongst lenders further that they can continue to drop rates over the final weeks of this year, barring any last minute surprises.”
CPI inflation for October is 4.6 per cent, down from 6.7 per cent in September.
At 95 per cent LTV, two and five-year deals are priced, on average, at 6.20 per cent and 5.73 per cent respectively. The cheapest deals on the market, as of 14 November, for this LTV bracket were priced at 5.99 per cent for two years and 5.59 per cent for five years.
At 85 per cent, average two-year rates stand at 5.87 per cent and 5.35 per cent for five-year fixes. The lowest rates for two and five-year deals stand at 5.49 per cent and 4.93 per cent respectively.
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 now £1,149 per month, down from £1,193 per month a year ago.
The cheapest two and five-year fixed rates for borrowers with a 40 per cent deposit are currently 4.99 per cent and 4.64 per cent respectively.
“With the markets anticipating that rates have peaked and will fall back next year, coupled with recent positive wage data, lenders could begin to review their affordability criteria,” said Smith. “It has been a challenging year, with higher rates and the squeeze on affordability meaning that some movers have had to reassess their budgets and look at options such as extending mortgage terms or searching for cheaper properties. An easing of affordability criteria would be positive news for many movers looking to take out a mortgage and is a trend to watch heading into 2024.”
