The average two-year fixed residential mortgage rate fell for the first time in two months to provide some hope for mortgage holders.
Rates fell to 6.79%, its first drop since 27 May and coming off Tuesday’s 15-year peak of 6.81%, according to financial data provider Moneyfacts.
The fall in mortgage rates comes as inflation fell to 7.9%, beating market predictions of 8%.
As such, consensus on the Bank of England rate peaks have shifted, with the market evenly split on a 5.75% and 6% peak according to Yahoo, lower than previous estimates of 6.5%.
Mortgage rates closely follow swap rates, which mimic gilt yields.
Two-year gilt yields, that is the returns paid on a government-issued bond, fell from 5.079% to as low as 4.792% yesterday, and is currently at 4.898%.