Average mortgage rates have fallen on a monthly basis, sinking to their lowest levels since the start of September 2022, data from Moneyfacts has revealed.
Moneyfacts UK Mortgage Trends Treasury report found the average two and five-year mortgage fell over the past month to 4.86 per cent and 4.91 per cent respectively, the lowest level since before Liz Truss’s mini-Budget.
This compares with the figures recorded in November when the average two-year stood at 4.94 per cent and the average five-year stood at 5.01 per cent.
Similarly, it also represents a fall on a yearly basis as in December 2024 the average two-year stood at 5.52 per cent and the average five-year stood at 5.28 per cent.
Moneyfacts finance expert, Rachel Springall, said: “Mortgage rates continue on the downward trend and November was particularly fruitful for fixed rate cuts.
“The re-pricing by lenders led to the average five-year fixed rate dropping below 5 per cent for the first time in over two years and sits at its lowest point since before the mini-Budget in September 2022, alongside its two-year counterpart.”
Springall also pointed out the average two-year fixed rate noted its biggest monthly fall since August this year and the five-year experienced its largest fall in six months.
The data found product choice overall rose from 6,918 recorded in Moneyfacts’s November report to 7,054, closing in on a record high for the market.
However, the shelf life of these products experienced a notable decline, falling from 21 days in November to 18 days.
Looking ahead to the new year, Springall said that this all paints a “positive picture” for borrowers.
“This year has not been without a few ups and downs for rate moves and product availability, but all signs are looking encouraging for the mortgage market to thrive moving into 2026,” she said.
“The Budget has been and gone, expectations for another base rate cut are high, and muted house price growth as a combination can lead to optimistic sentiment among buyers.”
However, Springall cautioned that homeowners who locked into a cheap fixed deal five years ago will need to accept that they will have to cover high repayments, with the Bank of England expecting 3.9mn households to refinance on to higher rates over the next three years.
tom.dunstan@ft.com
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