
The lowest available mortgage rate for a five-year fix is less than 4% for the first time in six months, data from a property listing firm showed.
The Rightmove weekly mortgage tracker found that as of today, a rate of 3.95% was available for a five-year fixed mortgage at 60% loan to value (LTV). This product was launched by HSBC today.
This is set to fall further after Barclays announced a 3.84% purchase product, which will come to market from 8 August. This launch undercut Nationwide’s 3.99% five-year fixed deal, which set off the latest sub-4% trend.
The lowest available two-year fixed rate at 60% LTV is currently 4.39%.
As of 7 August, the average five-year fixed mortgage rate was 4.86%, while the average two-year fixed rate was 5.24%.
These averages were marginally down on the typical two-year fixed rate of 4.88% and five-year fixed rate of 5.25% of last week. Average rates were also lower than last year’s pricing of 6.49% and 5.99% respectively.
Average rates across the LTV tiers
The average two-year fixed rate for a product at 60% LTV was 4.55% as of 7 August, while the average five-year fix came to 4.14%.
This was compared to last week’s respective rates of 4.59% and 4.19%, as well as the previous year’s 6.21% and 5.67%.
The lowest available 60% LTV two-year fixed rate was 4.39%.
At 75% LTV, the average two-year fixed rate fell from 5.08% last week to 5.05% today, while the five-year fixed rate moved from 4.73% to 4.69%. A year ago, these rates would have been 6.29% and 5.85% respectively.
The cheapest rates available at this tier were 4.63% for a two-year fix and 4.14% for a five-year fix.
For a two-year fixed rate mortgage at 85% LTV, the average rate fell from 5.27% to 5.24%, while the typical five-year fixed rate decreased from 4.91% to 4.88%. This time in 2023, the average rates were 6.51% and 6.07%.
The lowest rates at this tier came to 4.84% for a two-year fix and 4.47% for a five-year fix.
The typical two-year fixed rate at 90% LTV was 5.59% as of today, slightly higher than 5.58% a week earlier. At the same time, the average five-year fixed rate at this level stayed the same at 5.12%.
Last year, the rates were 6.72% and 6.15% respectively.
For a borrower with a 10% deposit, the lowest rate at this tier was 5.18% for a two-year fix or 4.75% for a five-year fix.
At 95% LTV, the average two-year fixed rate declined from 5.96% to 5.94%, while the average five-year fixed rate rose marginally from 5.48% to 5.5%. Compared to last year, this was down from the respective rates of 6.92% and 6.21%.
The lowest available rates at this bracket came to 5.54% for a two-year fix and 5.23% for a five-year fix.
Rightmove calculated that the average monthly mortgage payment for a typical first-time buyer home worth £227,924, on a five-year fix at 85% LTV, was now £1,119 over a 25-year term. This was down from an average monthly payment of £1,243 a year ago, when the typical asking price was lower at £225,552.
Shekina is the deputy editor at Mortgage Solutions and commercial editor at Mortgage Solutions and Specialist Lending Solutions. She has nearly eight years of experience in the B2B publishing market, having previously covered the hospitality, retail, pet, accounting and jewellery sectors.
Shekina has worked for Mortgage Solutions and Specialist Lending Solutions for almost five years. Here, she covers the market’s breaking news stories, engages with professionals in the sector, and oversees any commercially agreed content in partnership with mortgage-related companies.
This includes presenting webinars and hosting roundtable discussions on developing themes in the mortgage sector.
She is an NCTJ-trained journalist and was nominated for the Headline Money Awards Mortgage Journalist of the Year in 2021.
In her spare time, Shekina likes to read, travel, listen to music and socialise with friends.
She currently reports on current events in the mortgage market and liaises with financial clients to produce sponsored content.
Follow her on Twitter at @ShekinaMS