Discover the Lowest 2- and 5-Year Fixed Rates Since September 2022 According to Moneyfacts

Recent data from Moneyfacts indicates a notable decline in average mortgage rates for two- and five-year fixed deals. Both rates have reached their lowest levels since September 2022. The average rate for two-year fixed mortgages now stands at 4.86%, while the five-year fixed rate is at 4.91%. This trend marks the first occasion since May 2023 that the five-year fixed rate has dipped below 5%.

Current Mortgage Rates Overview

According to Moneyfacts, the average five-year fixed mortgage rate decreased by 0.10% this month from the previous rate of 5.01%. In a year-over-year context, this is a significant drop of 0.53% from 5.44% recorded in December 2022. The average Moneyfacts mortgage rate is currently at 4.91%. Below is the summary of current mortgage rates:

• Two-year fixed rate: 4.86% (down by 0.08% month-on-month)
• Five-year fixed rate: 4.91% (down by 0.10% month-on-month)
• Two-year tracker variable rate: 4.66% (unchanged month-on-month; down 0.80% year-on-year)
• Standard variable rate (SVR): 7.27% (unchanged month-on-month; down 0.58% year-on-year)

Market Activity and Trends

The mortgage market is showing dynamic shifts with a significant increase in product offerings. The total number of mortgage options has risen to 7,054, nearing record highs. This increase in choice reflects a growing effort to support borrowers seeking higher loan-to-value (LTV) deals.

Here’s a detailed look at the year-on-year changes for specific LTV offerings:

• Deals at 95% LTV: Increased by 111 products
• Deals at 90% LTV: Increased by 155 products

No other LTV tier has seen such a significant increase in product offerings over the past year. The volume of deals available at 90% and 95% LTV is the highest recorded since March 2008.

Expert Insights

Finance expert Rachel Springall from Moneyfacts commented on the improvements in the mortgage landscape. She noted that the growth in available products is particularly beneficial for borrowers with a small deposit or equity.

Springall emphasized that the Government’s push for lenders to provide more assistance to buyers is leading to increased competition and, consequently, better options for consumers. This positive momentum should not only encourage current borrowers but also potential buyers as we approach 2026.

Future Outlook

As 2023 concludes, the outlook for mortgage rates appears optimistic. With the recent Budget announcements and expectations for potential base rate cuts, there is hope for continued improvements in the housing market. However, existing homeowners who secured low fixed rates in the past may face higher repayment challenges in the coming years.

Approximately 3.9 million households are projected to refinance at higher rates over the next three years. Therefore, seeking financial advice before entering new mortgage agreements will be crucial to navigate the evolving landscape.