Average fixed mortgage rates have fallen for the second month running in the UK as a heated price war between lenders continues.
A typical two-year fixed rate mortgage now includes interest at 6.47%, compared to 6.70% a month ago, Moneyfacts data revealed on Tuesday.
Interest on the average five-year fix fell below 6%, after passing the mark late last month, from 6.19% to 5.97% meanwhile.
“Fixed mortgage rates have fallen across the spectrum, signalling a positive change in the market,” Moneyfacts finance expert Rachel Springall commented.
“Overall, the average two and five-year fixed rates have now fallen for the second month running, so borrowers could find cheaper deals to choose from.”
Rates on five-year fixed 90% loan-to-value mortgages fell below 6% for the first time since July to 5.78%, Springall pointed out, marking good news for those with limited funds for a deposit.
Lenders had committed to a flurry of rate hikes during the summer as fears mounted over how high the Bank of England would lift its base interest rate.
However, after the central bank left the base rate unchanged in August, lenders have repeatedly cut rates on mortgages in anticipation that the base interest rate would see a lower peak.
Though they include product fees and are targeted at those with more to deposit, Barclays PLC (LSE:BARC) and Skipton Building Society now offer rates as low as 5.25% and even 3.35% respectively.
Average mortgage rates do indeed sit higher than the 5.43% and 5.23% for two and five-year fixes last year in October.
However, Springall explained that growth in the number of deals on the market from 2,258 to 5,495 over the same period signalled stability was beginning to return.