Rachel Springall, Finance Expert at Moneyfacts, said:

“Fixed mortgage rates have fallen across the spectrum, signalling a positive change in the market. 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. These are encouraging signs for borrowers who may be looking for a new fixed rate deal, but they still may be on the fence about locking in, hoping rates will fall further in the weeks to come. Those with a limited deposit will find the average five-year fixed rate at 90% loan-to-value has dropped below 6% for the first time since July 2023 (5.81%) and is at its lowest point since June 2023 (5.23%).

“There is good news for borrowers with a limited deposit as product choice has grown consecutively over the past three months, at 90% and 95% loan-to-value. The volume of deals in each sector has blossomed to a level not seen since before the fiscal announcement, deals at 90% LTV are the highest since May 2023 (675), and deals at 95% LTV are the highest since the start of September 2022 (274). Across the whole mortgage market, product choice (5,495) is at its highest level since March 2008 and the average shelf life rose slightly to 16 days, a sign the market is stabilising.

“One area of the mortgage market to feel a negative impact of rate rises month-on-month may well impact consumers who have or will fall off their fixed rate deal. The average Standard Variable Rate (SVR) rose to 8.18% at the start of this month, standing at a record high. This rate has risen by 3.78% since the start of December 2021 and there may be borrowers either stuck or deciding to sit on their revert rate, hoping fixed rates will fall in the weeks to come. Borrowers would be wise to seek independent advice to go over their options or speak with their lender if they are struggling to make repayments.”