Flurry of mortgage interest rate cuts now that the average five-year interest rate is finally back below 6%
The average five-year fixed mortgage rate has fallen below 6 percent as borrowing costs for homeowners continue to fall.
The typical new five-year fixed mortgage now costs 5.99 percent, up from 6.03 percent on Wednesday, according to financial information service Moneyfacts.
The last time the average five-year rate, which includes all deposit sizes, was this low was in early July. On July 19, the typical five-year rate rose to 6.33 percent.
It comes at a time when a stream of lenders have announced they will cut their mortgage rates.
Cheaper deals: According to Moneyfacts, the average five-year fixed mortgage is now priced below 6% as several lenders have cut their rates
Halifax will launch a five-year fixed rate of 4.93 per cent next week, which would be the cheapest on the market.
Barclays and Clydesdale Bank also announced a series of mortgage rate cuts this afternoon.
Fixed two-year deals remain more expensive than five years. This is partly because there is more demand for them as borrowers take shorter terms in the hope that rates will become cheaper in the coming years.
> See which mortgage interest rate is best for you to apply for based on your home value
Moneyfacts says the average two-year mortgage rate is currently at 6.5 percent, up from 6.53 percent the day before.
Offers are available at significantly lower rates than these averages, especially for those with more than 40 percent equity in their property or a 40 percent down payment.
We’ve listed some of the cheapest rates below, and you can also use our search function to find the best deal for your mortgage size and deposit mortgage rate finder.
Simon Gammon, managing partner at broker Knight Frank Finance, said: ‘Lenders continued to cut mortgage rates in the wake of better inflation figures and the Bank of England’s decision to keep the base rate at 5.25 per cent this month, which will go a long way . to improve sentiment in the real estate market.’
However, he added that borrowers should not expect interest rates to drop much lower in the near future.
“We expect more marginal cuts in the coming weeks, but they will quickly reach a plateau,” Gammon added.
‘The best fixed rate deals already start at a four, and we expect rates to settle in that range until the Bank of England decides to cut the base rate, which is unlikely before next spring at the earliest.’
With new mortgage interest rates being launched regularly, Nicholas Mendes, mortgage technical manager at estate agent John Charcol, had this advice for anyone in the middle of a purchase or remortgage application:
‘This afternoon things really started between the lenders, in quick succession there has been a flood of prepayments from lenders.
‘For anyone with an application in play, speak to an agent to see if you can get a better deal than originally submitted.
‘Also for those who don’t use an estate agent, this is a chance to speak to someone to ensure you get the best deal now, but also for the future.’