Fixed mortgage rates are starting to ease, giving some much-needed relief to those feeling the pressure. According to Chris Ridge, My Financial Pro mortgage expert, we're finally seeing a drop in average rates for both two-year and five-year fixed products. This is the first time since mid-April, and it's all thanks to the recent positive economic news making its way into the mortgage market, encouraging lenders to cautiously reduce rates.
Chris adds, “Of course, we're all eagerly waiting for this week's base rate announcement, as lenders are likely to take further action based on that. They want a bit more certainty before making any major moves. But, unless we encounter any unexpected market surprises, we can expect rates to keep going down in the coming weeks. And if the signs continue to look positive, we might even see things speeding up!”
Let's take a look at the big picture, though. If we compare the rates from a year ago, UK homeowners are still facing some significant increases. So, while we celebrate the recent easing of rates, it's essential to keep things in perspective.
Latest data shows the average five-year fixed mortgage rate has climbed to 6.08%, up from 3.69% just a year ago. Similarly, the average two-year fixed mortgage rate has risen to 6.61%, from 3.66% a year back. And let's not forget the average 85% LTV five-year fixed mortgage rate, now at 6.15%, up from 3.63% last year. Meanwhile, the average 60% LTV five-year fixed mortgage rate has reached 5.82%, up from 3.44% a year ago.
For first-time buyers eyeing that dream property and opting for an average five-year fixed, 85% LTV mortgage, the average monthly mortgage payment now stands at £1,253. Keep these numbers in mind while navigating the mortgage market.
In conclusion, it's time to keep an eye on those rates and see how things unfold after the base rate announcement. Positive signs might just lead to even more favourable rates in the future. Until then, let's hope for the best and stay informed about the evolving mortgage landscape. Happy house hunting!
