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Rate drop continues…

Average rates across all fixed mortgage terms have fallen since the start of the year.

According to research from data provider, Moneyfacts.co.uk the average two-year fixed rate has reduced the most, falling by 0.24% since January this year to 2.52%.

Five-year fixed rates have dropped from 3.29% in January, to the current 3.10% and the 10-year rate has fallen to 3.43% from January’s 3.63%.

Charlotte Nelson, finance expert at Moneyfacts.co.uk said: “With competition still fierce in the market, it is little surprise that mortgage rates have fallen in the first half of 2016, reaching record lows yet again and currently showing no signs of stopping.

“Borrowers looking for a new mortgage deal today will be substantially better off than they were six months ago.  In fact, anyone considering a five-year fixed rate mortgage today would save themselves £240 a year compared to January.” (based on the average five-year fixed rate and a £200,000 mortgage over a 25-year term on a repayment only basis).

Nelson added that choice of ten-year fixed rates has multiplied from 80 in January to 127 today with the average rate falling by 0.20% in the same period.

“Borrowers with smaller deposits have not been left out either, with the average two-year fixed rate at 95% loan-to-value (LTV) falling by 0.19% from January 2016 to 4.09% today. However, with the Help to Buy Mortgage Guarantee scheme ending in December this year, it begs the question how long this can be sustained for.

“While the economy may have faced some uncertainty after the EU referendum one thing is for certain: mortgage competition is currently here to stay, and borrowers sitting on the standard variable rate or coming to the end of their mortgage deal would be wise to consider a fixed rate deal now, when they are still at record lows,” she added.

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