20 Nov Borrowers continue to enjoy competitive mortgage rates
Moneyfacts.co.uk has discovered that competition within the market is continuing unabated, with rates for two-year fixed mortgages dropping just 0.01% to 2.44% and the average rates for three and five-year fixed mortgages staying still at 2.60% and 2.75% respectively. The biggest drop in rates was seen for 10-year fixed mortgages, but with the decrease sitting at 0.07% and the rate shifting to 2.91%, this hardly represents a significant fall.
Mortgage fixed rate analysis
|Mortgages||Two year fixed||Three year fixed||Five year fixed||Ten year fixed|
|Six months ago||2.47%||2.66%||2.85%||3.00%|
Savings fixed rate analysis (£10,000 investment tier)
|Savings||One year fixed||Two year fixed||Three year fixed||Five year fixed|
|Six months ago||1.46%||1.63%||1.84%||2.15%|
“It appears that fixed mortgage rates are continuing to be cut despite the rise in interest rate SWAPs, a market that lenders generally use to hedge themselves against future interest rate fluctuations,” offered the website’s finance expert, Darren Cook. “The significant increase in SWAP rates indicates that markets may now be clawing back a previous factoring of a forecasted Bank base rate cut in the short term.
“The current average two-year fixed rate is currently 2.44%, however, this average rate reached its historical low of 2.20% two years ago in October 2017, so the current drive by some mortgage providers to cut rates could be a conscious strategy to make sure that they retain the borrowers who may be maturing from a very low fixed rate secured two years ago.