According to Rightmove, the average five-year fixed rate fell from its peak of 6.11 per cent in July to 5.03 per cent, whilst the two-year fixed rate has fallen from 6.61 per cent to 5.44 per cent.
LTV tiers
At 60 per cent loan to value (LTV), the average two-year fixed rate is 4.83 per cent, with the lowest rate coming to 4.62 per cent, with the average five-year fixed rate coming to 4.44 per cent and the bottom-most rate pegged at 4.23 per cent.
Within the 75 per cent LTV tier, the average two-year fixed rate is 5.27 per cent and the average five-year fixed rate is 4.95 per cent. The cheapest two and five-year fixed rate is 4.7 per cent and 4.34 per respectively.
Going up to 85 per cent LTV, the average two-year fixed rate is priced at 5.57 per cent and the average five-year fixed rate is 5.12 per cent. The lowest rates were 5.02 per cent for the two-year fixed rate and 4.52 per cent for the five-year fixed rate.
At 90 per cent LTV, the average two-year fixed rate came to 5.7 per cent and the average five-year fixed rate is 5.18 per cent. The bottom-most rates were 5.29 per cent and 4.79 per cent apiece.
Within 95 per cent LTV, the average two-year fixed rate is priced at 5.84 per cent and the average five-year fixed rate is 5.44 per cent. The lowest rates were 5.72 per cent for the two-year fixed rate and 5.24 per cent for the five-year fixed rate.
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 £1,106 per month, down from £1,134 per month a year ago.
Mortgage rates may see ‘chunkier cuts’
Matt Smith, Rightmove’s mortgage expert said: “Yet another week – the 21st in a row – of marginal percentage point drops to mortgage rates is positive news for home movers. Swap rates have also fallen further today following the early Christmas present of the lower-than-expected fall in inflation.
“The downward trajectory of swap rates has also been fuelled by a third consecutive base rate hold, and the markets’ belief that base rate could be cut as early as Spring 2024.”
He continued: “This may give lenders the space to make chunkier cuts to their mortgage rates in the short term. But it’s likely that lenders will wait to pass these on to borrowers until the new year, to take advantage of the seasonal jump in demand that usually happens in January.”
