Moneyfactscompare has analysed the average rates offered across mortgages since the last Base Rate cut in August.
Mortgage rates have fallen since August
The average standard variable rate (SVR) has fallen below eight percent for the first time since August 2023 (7.85 percent). It stands at 7.99 percent, down from 8.18 percent in March 2024.
According to Moneyfacts, many lenders have moved to pass on last month’s 0.25 percent base rate cut, seeing the SVR fall from 8.16 percent since the start of August 2024.
In September 2023, both the average two- and five-year fixed rates were above six percent, at 6.7 percent and 6.19 percent, respectively. Since the start of March 2024, the average two-year fixed rate has fallen from 5.76 percent to 5.56 percent and the average five-year fixed rate has fallen from 5.34 percent to 5.2 percent.
These average rates have fallen from 5.77 percent and 5.38 percent respectively since last month.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, commented: “The mortgage market has seen a bustle of activity over the last month, with the Bank of England base rate cut, and a more favourable swap rate market, creating a positive influence on fixed rate pricing.
“There have also been several lenders passing on the 0.25 percent base rate cut to customers, leading to the Standard Variable Rate (SVR) falling below eight percent for the first time since August 2023. The expectations for another base rate cut are mixed, but it looks more likely that the next drop could come in November, which is after the Budget.”
New or existing borrowers will ideally want to see mortgage rates fall further in the months to come, particularly if they are about to come off a cheap fixed deal.
Ms Springall continued: “Any borrower looking at their options today for peace of mind could lock into a fixed mortgage early, but it would be understandable for some to adopt a ‘wait and see’ approach, hoping rates will come down by bigger margins.
“However, when falling off a cheap rate onto a revert rate, borrowers will typically see their monthly repayments rise, so seeking advice to weigh up all their options before their deal ends is essential. A typical mortgage being charged the current average SVR of 7.99 percent would be paying £383 more per month, compared to a typical two-year fixed rate.”
While afordability remains a key issue for borrowers, particularly first-time buyers, overall average mortgage rates are s”lowly dipping down” to levels not seen for around six months.
Ms Springall concluded: “This month also marks the two-year anniversary of the fiscal announcement, so any borrowers about to come off a two-year fixed deal may be pleased to see the market is much more stable and lenders continue to chop rates to entice new business.”
