Average mortgage rates in the UK have already dropped amid expectations that the central bank's base rate won't go up as high as previously thought.
In the hours after the Bank of England opted to hold Britain’s base interest rate at 5.25%, average mortgage rates dropped on both two and five-year fixes, according to Moneyfacts.
A two-year fix now typically offers interest at 6.56%, the comparison site reported, down from 6.58% prior to Thursday’s decision by the central bank.
Interest on the average five-year fixed mortgage dropped from 6.07% to 6.06% meanwhile, as lenders reacted to the Bank’s first pause in hikes this year.
Nationwide Building Society almost instantly reduced rates on the news yesterday, with TSB Banking Group (LSE:TSB), HSBC Holdings PLC (LSE:HSBA) and NatWest Group PLC (LSE:NWG) having already announced cuts for this week.
Analysts have tipped that mortgage rates could continue to fall as banks reverse moves made earlier this year when higher peak interest was expected.
“Further increases are still very much on the table,” Hargreaves Lansdown analyst Sophie Lund-Yates warned, but “the decision looks likely to offer some respite to soaring mortgage rates”.