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Fixed mortgage rates start falling from 14-year highs: Average five-year deal now at 5.59% – down from 6.51% last month
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Mortgage rates with a fixed term of five years fell below 6 percent for the first time in seven weeks.
The five-year average fixation is now 5.59 percent, down from a 14-year high of 6.51 percent last month, comparison website Moneyfacts says.
It says the two-year fixed rate has also fallen, with deals averaging 6.13 percent, down from a peak of 6.65 percent in October.
Rate cut: The average five-year fixed mortgage is now 5.59%, down from a 14-year high of 6.51% last month, according to Moneyfacts
Yesterday, both Santander and Barclays cut their fixed income deals by 0.3 percentage points.
Mortgage rates shot up last month in response to Kwasi Kwarteng’s disastrous mini-budget in September. About 80 percent of mortgages are currently fixed.
Rachel Springall, financial expert at Moneyfacts, says: ‘Borrowers can breathe a sigh of relief as they see fixed mortgage rates starting to fall, but there may still be a lot more room for improvement.
Rates could fall even further, but there’s no clear answer on how fast that could be.
“Customers may feel that they need to be patient before they take out a new fixed mortgage.”
Tracker rates have also started to drop. Santander cut its tracker range by 1.25 percentage points yesterday.
And on Monday, the Yorkshire Building Society cut its tracker products by up to 1.16 percentage points. Tracker deals are tied to the Bank of England’s base rate, which is currently 3 percent.
They have grown rapidly in popularity in recent months following major increases in interest rates for fixed mortgages.
a.cooke@dailymail.co.uk