The average five-year fixed mortgage rate has fallen below 6% for the first time in seven weeks, with some lenders – including Santander – cutting rates on certain products by as much as 1.25%.
According to research from Moneyfacts.co.uk, the average rate for a five-year fixed mortgage now sits at 5.95%, the lowest figure since 5th October.
This is the latest sign that the impact of Kwasi Kwarteng’s mini-budget in September – which saw mortgage rates soar and borrowers’ affordability squeezed – is fading.
In light of this, Santander has cut its two-year tracker at a 90% LTV down to 5.19%, a 1.25% reduction. The lender has also abandoned its £35 funds transfer fee on mortgage completion, effective for mortgage offers issued after 21st November.
“Borrowers who paused their home ownership plans, or indeed parked the idea of refinancing, may now be tempted to scrutinise the latest deals on offer,” said Rachel Springall, finance expert at Moneyfacts.co.uk, adding:
“After the [mini-budget], the average two and five-year fixed mortgage rates rose sharply, but they are edging further away from their daily peak [on October 20th].
However, it is worth noting that rates could fall further still, but there is no clear answer as to how quickly that may be.
Borrowers may feel they have to be patient for a little while longer yet before they commit to a new fixed mortgage, or even wait until next year to see how the market recovers from the recent interest rate uncertainty.”
