According to the latest Moneyfacts UK Mortgage Trends Treasury Report, average mortgage rates on two- and five-year fixed rate mortgages fell month-on-month, by 0.21 and 0.18 percentage points.
The financial information provider said that the average two-year fixed rate is now at its lowest level since February 2024, at 5.56%, and the five-year rate is at its lowest level since March 2024 at 5.2%.
It means the average two-year fixed rate has now been higher than the five-year equivalent since October 2022.
Rachel Springall, finance expert at Moneyfacts, explained: “This month marks two years since the fiscal announcement took place, and subsequent unsettled times saw significant rises to mortgage rates. At the start of September 2022, the average two-year fixed mortgage rate stood at 4.24%; a year later, it was 6.7%.
“Fixed mortgage rates are now much lower than they were this time last year, but it remains the case that the average five-year average rate is lower than its two-year counterpart, which has been the case since October 2022.”
Despite the fall in rates, two- and five-year fixed rates are still significantly higher than two years ago, when they were 4.24% and 4.33% respectively.
This means that borrowers coming off a two-year fixed rate mortgage and looking for a new deal will still face higher rates and therefore higher monthly repayments.
Variable rate reductions
The average two-year tracker variable mortgage fell slightly to 5.68%, said Moneyfacts.
The average ‘revert to’ rate or standard variable rate (SVR) fell to 7.99%. It peaked at 8.19% in December 2023.
Product choice overall fell slightly month-on-month, to 6,523 options.
Related: Homeowners could save £330 a month switching from SVR to fixed rates
