The average five-year fixed mortgage rate falls below 6% for the first time since September

Average five-year fixed mortgage rate falls below 6% for first time in nearly two months as lenders lower rates from October high

  • The five-year fixed rate average is now 5.95%, down from 6.32% on November 1
  • The fixed two-year average is 6.13%, compared to 6.47% at the start of the month
  • Lenders including Santander have slowly lowered mortgage rates
  • Nationwide cuts fixed rates by up to 0.3% tomorrow (Wed 23)
  • In October, the five-year fixed rate hit a high of 6.61%, the highest since September 2008, when it hit 6.62%.

Interest on the average five-year fixed mortgage fell below 6% to 5.95% for the first time in seven weeks as more lenders cut rates.

Two-year fixed rate transactions now average 6.13%, according to Moneyfacts.

These are down from 6.32% for a five-year fix and 6.47% for a two-year fix on November 1.

The lower five-year average will save borrowers £43 on their monthly payments for a £200,000 mortgage, compared to those who fixed at the start of the month. For a fixed two-year contract, the saving is £42.

Gradual decline: The average five-year fixed-rate mortgage rate fell below 6% for the first time in seven weeks

Mortgage rates soared following then-Chancellor Kwasi Kwarteng’s ill-fated mini-budget. Borrowing costs in the UK jumped as investors sold their UK government bonds – known as gilts – before the Bank of England stepped in by announcing a bond-buying program of £65 billion to shore up the market.

The average two-year fixed rate rose from 4.74% on September 23 (Budget Day) to 5.17% a week later on September 30.

On October 20, the two-year and five-year patches reached highs of 6.65% and 6.61% respectively.

The last time the average two-year fixed rate mortgage was 6.65% or higher was in August 2008, at 6.94%. The last time the average five-year fixed rate mortgage was 6.51% or higher was in September 2008, at 6.52%.

However, there is good news as rates are slowly starting to come down. Last week, the average two-year fixed-rate transaction cost across all LTV brackets fell every day, according to Moneyfacts.

Rachel Springall, finance expert at, said: “Borrowers may well breathe a sigh of relief as fixed mortgage rates start to fall, but there may be a lot more room for that. ‘improvement.”

“As the average five-year fixed mortgage rate falls below 6% for the first time in seven weeks, borrowers who have put their homeownership plans on hold, or who have in fact given up on the idea of refinancing, may now be tempted to review the latest offers. .

“However, it should be noted that rates could fall further, but there is no clear answer as to how quickly this could be. Today, only a handful of lenders offer fixed offers below 5%. Borrowers may feel like they have to wait a little longer before committing to a new fixed rate mortgage, or even wait until next year to see how the market recovers from the recent interest rate uncertainty.

Mortgage rates have started to fall after rising sharply last month following the mini-budget

Mortgage rates have started to fall after rising sharply last month following the mini-budget

This week, Santander announced that it was cutting all of its residential mortgage rates by up to 0.45%. All residential trailing rates have also been reduced by up to 1.25%, the lender said in a note to brokers.

Additionally, Nationwide is slashing rates for its two-, three-, and five-year fixed agreements by up to 0.3%. For new customers who move, the lender’s two-year fixed rate of 75% will drop by 0.25% to 5.39%, with a fee of £999.

And for first-time buyers, a five-year fixed rate at 90% LTV will reduce by 0.15% to 5.29%, with a fee of £999. Its 85% two-year LTV tracking rate also fell, down 0.3% to 3.94%, with a fee of £999.

Natalie Hines, founder of Sutton Coldfield-based broker Premier One Mortgages, said: ‘We are already starting to see five- and two-year fixed rates come down and I’m sure we’ll see other lenders follow suit over the next few months. weeks. .

“I think we can expect to see further increases in the base rate, but it will eventually stabilize between 3% and 4%.

“With swap rates now stabilizing, the average fixed rate 18 months from now is unlikely to be any different from where we are now.”

What to do if you need a mortgage

Borrowers who need to find a mortgage because their current fixed rate contract is coming to an end, or because they have agreed to buy a home, have been urged to act, but not panic.

Banks and building societies are still lending and mortgages are still being offered and applications are being accepted.

However, rates change rapidly and there is no guarantee that transactions will last and not be replaced by mortgages at higher rates.

This is Money’s best mortgage rate calculator, powered by L&C, that can show you deals that match your mortgage and property value.

What if I need to remortgage?

Borrowers should compare rates and speak to a mortgage broker and be prepared to act to get a rate.

Anyone with a fixed-rate deal ending in the next six to nine months should consider how much it would cost them to remortgage now — and consider entering into a new deal.

Most mortgage transactions allow fees to be added to the loan and they are then only charged at the time of subscription. By doing so, borrowers can secure a rate without paying costly arrangement fees.

What if I buy a house?

Those who have agreed to buy a home should also aim to get quotes as soon as possible, so they know exactly what their monthly payments will be.

Homebuyers should be wary of overstretching and prepare for the possibility that house prices will fall from their current high levels, due to higher mortgage rates limiting people’s ability to borrow.

How to Compare Mortgage Costs

The best way to compare mortgage costs and find the right deal for you is to talk to a good broker.

You can use our best mortgage rate calculator to view offers that match your home’s value, mortgage size, term, and fixed rate needs.

Be aware that rates can change quickly, however, and so the advice is that if you need a mortgage, compare rates and then speak to a broker as soon as possible, so they can help you find the loan mortgage that’s right for you.

> Check out the best fixed rate mortgages you could apply for


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