The most recent data from Moneyfacts shows that there has been a decrease in the average two-year fixed rate across all LTV tiers by 1 basis point to 5.92% in the previous week. Similarly, the average five-year fixed rate has also dropped by a single basis point to 5.5%. Three-year fixed rates have seen the most substantial reduction, with a decrease of 3 basis points to 5.63%.
In the 65% LTV tier, average rates have experienced the most notable reduction, declining by 4 basis points to 5.59%. Rates in the 60% LTV tier have decreased by 3 basis points to 5.39%. At higher LTVs, there has been less movement, with rates either remaining constant or decreasing by between 1 and 2 basis points.
Several different LTV tiers have seen substantial drops over the past week. Average rates on no-deposit 100% LTV deals have fallen by 4 basis points to 5.11%, 85% LTV rates have decreased by the same amount to 5.85%, and 65% LTV rates have also seen a decrease by the same margin to 5.16%.
When it comes to five-year fixes, there has been minimal movement, with most LTV tiers experiencing a decrease of one basis point or remaining unchanged. At 75% LTV, average rates have decreased by 2 basis points to 5.34%, and at 60% LTV, they have fallen by the same amount to 5.01%.
Despite the fluctuations in shorter-term rates, average 10-year fixed rates have remained unchanged at 5.88%.
Rachel Springall, a finance expert at Moneyfacts, has stated that over a dozen lenders have reduced fixed rate mortgages this week, resulting in a slight decrease to both the average two- and five-year fixed rates. Lenders such as Barclays Mortgage, Halifax, First Direct, Lloyds Bank, and Virgin Money, as well as building societies including Skipton Building Society, Nationwide Building Society, and Coventry Building Society, have made moves to reduce fixed rates.
It is expected that due to the volatility of swap rates, fixed mortgage rates will continue to decrease over the next few weeks. This downward trend in mortgage rates, combined with the recent cuts by various lenders, may present potential opportunities for those in the market for a new mortgage or looking to switch to a better deal.
The potential future decreases in fixed mortgage rates will be interesting to observe as the market continues to respond to ongoing economic and financial developments.
Source: Mortgage Finance Gazette.