Mortgage rates in the UK have hit their lowest level since early September 2022, the first time the average five-year fixed rate has fallen below 5% since May 2023.
Citing new data from Moneyfacts, the guardian reported that the UK’s average two- and five-year fixed mortgage rates have fallen to 4.86% and 4.91% respectively.
Why have UK mortgage rates hit their lowest level since September 2022?
This sharp decline in UK mortgage rates is attributed to growing confidence among lenders that the Bank of England will soon reduce interest rates from 4% to 3.75%.
The Moneyfacts average mortgage rate fell from 4.99% to 4.91% month-on-month, and fell 0.53% year-on-year from 5.44% in December 2024.
Rachel Springall, 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 fall since August. The five-year fixed rate also recorded its deepest decline in more than six months.
As a result, the average lifespan of a UK-based mortgage product has been reduced to just 18 days, while the number of mortgage deals available has increased to more than 7,000.
This positive trend in UK mortgage rates reflects a changing landscape in the UK property market, offering prospective homeowners easier borrowing terms.
