The average two-year fixed mortgage rate has seen its biggest drop since December 2022, according to financial information website Moneyfacts. The average rate fell from 5.93 percent at the start of January this year to 5.56 percent at the start of February 2024.

Five-year fixed mortgage rates also decreased, going from 5.55 percent to 5.18 percent on average between the start of January and February this year. Rachel Springall, a finance expert at Moneyfacts, said: “Borrowers searching for a new mortgage deal may be delighted to know fixed mortgage rates continued their downward trend, with the average two-year fixed rate dropping by its biggest margin since December 2022.”

She added: “Those borrowers who have waited patiently in recent months to re-finance, or indeed are preparing for when their mortgage deal expires, would be wise to review rates, as lenders are closely monitoring the volatile swap rate market, which tends to influence fixed-rate pricing.”

Rachel concluded: “There have been big expectations for fixed rates to fall further, and whether now is the right time to refinance will come down to an individual’s circumstances.”

“Lenders are always reviewing their ranges, and it’s likely rates will change in the coming weeks due to future rate expectations,” says an expert. Some borrowers might be waiting on their lender’s standard variable rate (SVR) while they decide what to do. According to Moneyfacts, the average SVR at the start of February was a whopping 8.17 percent.

Ms Springall added: “The average two- and five-year fixed rates are much lower than the average SVR. It’s wise to seek advice from an independent broker to see if you could save a decent sum on your monthly repayments by changing your mortgage deal.”

She also mentioned that mortgage rates have fallen for first-time buyers. “The average two-year fixed-rate mortgage at 95 percent loan-to-value (LTV) has dropped below six percent for the first time since May 2023 (sitting at 5.84% at the start of February), much lower than six months ago, when it was just over seven percent.”

“Product choice has also increased at this LTV bracket.” Moneyfacts used data from the first available day of each month for its analysis.

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