Average five-year fixed-rate mortgages are finally priced below 6% for the first time in several months as lenders continue to anticipate a lower peak in Britain’s base interest.
According to Moneyfacts, the average five-year fix fell from 6.03% to 5.99% between Wednesday and Thursday, after peaking at 6.37% in early August.
Average rates on two-year fixed mortgages fell too, Moneyfacts reported, from 6.53% to 6.50%.
Having raised mortgage rates rapidly earlier this year on fears the Bank of England could hike base interest more drastically to tackle inflation, banks have since scaled back prices.
The central bank’s decision to hold interest at 5.25% last week added fuel to the fire in this emerging mortgage war, with HSBC, Nationwide and Natwest all having cut rates in recent days.
“Average mortgage rates continue to pare back from lofty heights seen in July following sizeable falls in inflation,” interactive investor analyst Myron Jobson explained.
“The latest fall in rates is another sign that the mortgage crisis which has stopped many from participating in the property market this year is turning a corner.”
Some lenders charge even less meanwhile, with NatWest’s 4.84% five-year and Banco Santander (LSE:BNC)’s 5.43% two-year fix highlighted by Moneyfacts for their low rates.