In a notable development, average two-year fixed mortgage rates have experienced their most significant monthly decrease since December 2022, as reported by financial information website Moneyfacts. At the beginning of February, the average two-year rate stood at 5.56 per cent, down from 5.93 per cent in January, marking the most substantial monthly decline in over a year. Similarly, average five-year fixed mortgage rates also saw a modest decrease, dipping by 0.37 per cent to 5.18 per cent.

Despite these rate reductions, around 1.6 million borrowers with expiring cheaper deals this year may encounter increased costs upon remortgaging. This concern is particularly pertinent for borrowers currently on their lender's standard variable rate (SVR), which averages 8.17 per cent as of February. Rachel Springall, a finance expert at Moneyfacts, advised borrowers to consider seeking advice from independent brokers to explore potential savings on their monthly repayments by switching mortgage deals. Additionally, Moneyfacts' data revealed that average two-year rates for first-time buyers, with a five per cent deposit, had fallen below six per cent for the first time since May last year, accompanied by an expansion in product choice.

Source: City A.M.