Relief for borrowers as fixed-term mortgage rates drop to a six-month low

Fixed-term mortgage rates have dropped to a six-month low, in a further reprieve for borrowers.

Average two-year and five-year fixed-rate mortgages have fallen for the fourth consecutive month, says analyst Moneyfacts.

It comes ahead of the Bank of England base rate announcement tomorrow.

Experts are split as to whether the Bank will go for another rate rise after turmoil in the global financial markets.

The average cost of a two-year deal has fallen from 5.44  per cent in February to 5.32 per cent this month, while five-year fixes have slipped 0.2 percentage points to 5  per cent. 

This is the biggest gap between the rates in 15 years. 

Rachel Springall, from Moneyfacts, says: ‘As the overall two and five-year fixed average rates drop to their lowest levels in six months, borrowers who put their plans to remortgage on hold towards the tail end of last year may now be looking at the latest offers.’

Karen Noye, mortgage expert at wealth manager Quilter, says fixed-rate mortgages are likely to keep falling even if the Bank raises its rate. 

‘For those still opting to move house, it may be worth fixing for two years to minimise the amount of time spent fixed on an inflated rate and then make the most of significantly lower predicted rates in 2025,’ she says.

t.armstrong@dailymail.co.uk