Average two- and five-year mortgage rates fell this week after widespread downgrades by lenders, according to Moneyfacts.
The latest Moneyfacts Rate Watch found that the average two-year fixed rate now stands at 5.81%, up 98bps from 4.83% at the start of March but down from a recent high of 5.90% earlier this month.
Meanwhile the five-year fixed rate has risen to 5.70%, 75bps higher than in early March, but also down slightly from its peak of 5.78%.
In the past one week the two-year average is 5.87% and the average five-year average was 5.78%.
The types of loans that saw the biggest reductions this week were those with large deposits.
Five-year fixes at 65% LTV were reduced by 19bps on average, while two-year fixes at 65% LTV were reduced by 18bps.
Moneyfacts head of consumer finance Adam French said: “Today marks two weeks of lower mortgage rates, with lenders making meaningful cuts across many products.” Rates have come down from their recent peaks, providing some relief to borrowers, although the broader picture is still one of high costs.
“In total, 18 lenders reduced their rates, while only two raised their rates and one made a mix of changes.
“However, it’s important to keep this development in perspective. Mortgage rates remain around 100 basis points higher than before the start of the conflict in Iran, adding around £1,700 a year to the cost of a typical mortgage. Although standard rates are down around 9bps from their recent highs, saving borrowers around £145 a year.”
Significant changes this week
• Accord Mortgages – Select fixed rates increased 10bps
• Barclays Mortgage – Selected fixed rates cut by up to 36bps
• Bluestone Mortgages – Select fixed rates increased by up to 35bps
• Chorley Building Society – Fixed rates reduced by up to 70bps; deadlines extended; selected products are withdrawn; early withdrawals for highly discounted variable rate loans
• first direct – Fixed rates reduced by up to 38bps (2 years) and 25bps (5 years)
• Furness Building Corporation – New products with variable discounts introduced with returns and free analysis incentives
• Gen H – Mixed changes: fixed rates reduced (up to 10bps) for low LTVs and increased (up to 20bps) for high LTVs
• HSBC – Selected fixed rates cut by up to 17bps; deadlines have been extended
• Halifax – Selected fixed rates reduced by up to 15bps; The Family Boost product has been reduced
• Hinckley & Rugby Building Society – LTV limits and maximum loan sizes updated
• Leek Building Society – Deadlines extended across range
• Lloyds Bank – Selected fixed rates cut by up to 15bps
• Melton Building Society – Discounted variable rate withdrawn
• NatWest – Fixed and variable rates cut to 37bps and 34bps respectively; deadlines have been extended
• NatWest Intermediary Solutions – Fixed and tracker rates reduced by up to 37bps and 34bps respectively; deadlines have been extended
• Nationwide Building Corporation – Fixed rates cut by up to 25bps
• Newbury Building Society – New fixed and discounted products introduced
• Newcastle Building Society – Selected rates reduced by up to 20bps; A new construction product is introduced
• Major Construction Corporation – Fixed rates reduced by up to 12bps; new products are introduced; fees have increased
• Royal Bank of Scotland – Fixed and variable rates cut to 37bps and 34bps respectively; deadlines have been extended
• Saffron Building Society – Discounted variable rate withdrawn; A new JBSP and standard contractor standards have been introduced
• Santander – Selected fixed rates reduced by up to 25bps
• Scottish Building Society – Fixed rate product withdrawn
• Skipton Building Society – Fixed rates and tracker reduced by up to 10bps; delayed start rates reduced by up to 26bps; deadlines have been extended
• TSB – Fixed rates reduced by up to 60bps; tracker rates reduced by 30bps; deadlines have been extended
• Teacher Development Organization – Many updates: new benchmarks introduced; selected prices increased and the costs raised; previous products have been discontinued
• Vida Homeloans – Selected fixed rates reduced by up to 106bps
• Virgin Money – Fixed rates reduced by up to 45bps (purchase) and 35bps (mortgage); tracker prices are reduced; deadlines have been extended
• West Brom Building Society – Selected rates reduced by up to 30bps; new products introduced with cashback incentives
