UK mortgage rates have hit their lowest level since the start of September 2022, the first time the average five-year fixed rate has fallen below 5% since May 2023.
Citing new data from Moneyfacts, The Guardian reported that the average UK two- and five-year fixed mortgage rates fell to 4.86% and 4.91% respectively.
Why have UK mortgage rates hit their lowest level since September 2022?
This very low level of UK mortgage rates is attributed to lenders’ growing confidence that the Bank of England will soon cut interest rates from 4% to 3.75%.
Moneyfacts’ average mortgage rate plunged from 4.99% to 4.91% month-over-month, and it fell 0.53% year-over-year, from 5.44% in December 2024.
Rachel Springall, financial expert at Moneyfacts, noted that November was particularly favorable for fixed rate cuts, with the average two-year fixed rate facing its biggest monthly fall since August. The five-year fixed rate also recorded its biggest fall in more than six months.
As a result, the average shelf life of a UK-based mortgage product has fallen to just 18 days, while the number of mortgage transactions available has increased to more than 7,000.
This positive trend in UK mortgage rates reflects a changing landscape in the UK property market, providing potential homeowners with easier borrowing terms.
