Average two-year mortgage rate drops below six per cent in sign pain for borrowers is easing
The average interest rate for a fixed two-year mortgage has fallen below six per cent for the first time since June.
Moneyfacts has reported the average two-year fixed rate is now 5.99 per cent, down from the peak of 6.86 reached in July.
Competition among lenders is driving rates lower, noted partner at Knight Frank Finance Hina Bhudia.
Bhudia said: “Mortgage rates have been easing since late July and the battle for market share underway among lenders could mean we see a few more marginal cuts this side of Christmas.
“The lenders are all behind on their targets and are trying to catch up by positioning themselves as among the cheapest on the high street.”
Those looking to remortgage or purchase a home today might see the rate being “far higher” than what they’re used to, Bhudia said, but it should still put some borrowers at ease.
“The increasingly benign outlook for interest rates has given many borrowers the clarity they need to come off the sidelines and make a decision,” she added.
“House prices are rising and mortgage approvals ticked up in the most recent month, though from a low base. Whether this is really the turning point in the cycle is hard to say while trading is so thin, but if this isn’t the bottom then we are close.”