The average five-year fixed mortgage rate has dropped below 6 per cent for the first time in seven weeks, according to analysis.
Mortgage lenders are offering 5.95 per cent on average for a five-year fixed-rate deal, Moneyfacts.co.uk found. The average two-year fixed-rate mortgage remains above 6 per cent, at 6.13 per cent.
Mortgage rates rocketed amid market turmoil after the mini-budget in September. On September 23, the average five-year fixed mortgage rate was 4.75%, and the two-year fix was 4.74%.
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By October 20, the average five-year deal was 6.51 per cent and a two-year product was 6.65 per cent. Rachel Springall, a finance expert at Moneyfacts.co.uk, said: “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.
“After the fiscal announcement (on September 23) the average two and five-year fixed mortgage rates rose sharply, but they are edging further away from their daily peak (on October 20). However, it is worth noting that rates could fall further still, but there is no clear answer as to how quickly that may be.”
Rises in the Bank of England base rate have been pushing up borrowing costs.
Ms Springall added: “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.”
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