Rates Continue to Fluctuate Across Mortgage Sectors

Since the start of September 2023, the average two-year fixed rate has fallen from 6.70% to 5.76% and the average five-year fixed rate has fallen from 6.19% to 5.34%. T

These average rates have, however, risen from 5.56% and 5.18% respectively since last month.

On a 10-year fixed rate mortgage, the average rate has risen from 5.82% to 5.98% since September 2023. The rate has risen from 5.87% since the start of February 2024.

The average standard variable rate (SVR) stands at 8.18%, up from 8.09% in September 2023. The rate has risen slightly from 8.17% since the start of February 2024.

These figures come from Moneyfactscompare whose mortgage expert, Rachel Springall, says: “The downward turn in fixed mortgage rates has gone in the opposite direction over the past month, with lenders vigorously re-pricing deals in response to volatile swap rates. It is worth noting that rates are much lower than six months ago, when both the average two- and five-year fixed mortgage rates were over 6%.

“The last time the Bank of England increased base rate was back in August 2023, but no change does not mean stagnation in mortgage rates as other influences remain at play, so borrowers must not be complacent if they are searching for a new deal. Indeed, lenders have been quick to reassess their rate pricing over the past month and even pulled deals from the market. It is vital lenders consider the volatility surrounding swap rates, so mortgage rate pricing can quickly change direction in a matter of weeks. Despite notable rate cuts made between the start of January and February, the average two- and five-year rates saw a sizeable cut.

“Borrowers worried about securing a new deal would be wise to seek advice from an independent broker, and any existing customers should speak to their lender immediately if they are struggling with repayments. 

“Those coming off a fixed rate deal will find the average Standard Variable Rate (SVR) stands above 8%, so it’s much higher than the average two-year fixed rate. A typical mortgage being charged the current average SVR of 8.18% would be paying around £308 more per month, compared to a typical two-year fixed rate (5.76%). First-time buyers with limited deposits would be wise to seek advice in the first instance when looking for a mortgage, but their biggest hurdle to become a homeowner is finding an appropriate property while affordable housing remains in short supply.”