UK mortgage rates have hit their lowest mark since early September 2022, the first time the average five-year fixed rate has fallen below 5% since May 2023.
Referring to new data from Moneyfacts, The Guardian reported that average two- and five-year fixed UK mortgage rates have fallen to 4.86% and 4.91% respectively.
Why UK mortgage rates hit lowest since September 2022?
This steep low in UK mortgage rates is attributed to lenders’ growing confidence that the Bank of England will soon cut interest rates from 4% to 3.75%.
Moneyfact’s average home loan rate fell from 4.99% to 4.91% month-on-month and is down 0.53% year-on-year from 5.44% in December 2024.
Rachel Springall, a finance expert at Moneyfacts, noted that November was particularly favorable for fixed rate cuts, with the average two-year fixed rate facing its biggest monthly drop since August. The five-year fixed rate also recorded its deepest fall in over six months.
As a result, the average duration of a UK-based mortgage product has fallen to just 18 days, while the number of mortgage deals available has increased to over 7,000.
This positive trend in UK mortgage rates reflects a changing landscape in the UK housing market, offering potential home owners easier loan terms.
