Good news from Moneyfacts – rates are lower than they’ve been since last summer.
Mortgage rates have fallen to their lowest level for six months, according to independent financial website Moneyfacts. New figures posted on its website have shown that the average two and five-year fixed rate deals fell to 5.93% and 5.5%, respectively. Moneyfacts figures show the average of all products available, so this doesn’t necessarily mean this is the rate that the average borrower will pay.
A spokesperson for the website said that consecutive reductions to rates would be a great relief for borrowers who need to remortgage in 2024.
More choice
The Moneyfacts UK Mortgage Trends Treasury Report data has revealed that borrowers now have more choice. There are 200 more products month-on-month now. The website claims that a rise in choice and cheaper mortgage rates are promising signs for those looking to remortgage this year.
MB Associates Managing Director, Monica Bradley, welcomes the good news after spending much of last year having to inform her remortgaging clients that they were going to see substantial increases in their monthly payments. However, she’s keen to point out that rates are still higher than they’ve been historically.
‘Even though this is encouraging news, people who are remortgaging are still likely to see significant increases in their rate compared to what they were paying previously,’ she says. ‘We hope that these reductions will continue, but this will be at a gradual pace, and it’s hard to see the cost of borrowing returning to the ultra-low rates we enjoyed for so long.
Higher mortgage payments
In essence, anyone nearing the end of their two- or five-year fixed-rate mortgage term will still pay more than before. While we welcome lower rates and positive indications that the property market may be picking up, Monica wants to see some consistency in the market in the long term.
‘Most lenders are pricing their fixed rates with virtually no profit margin, so anything can happen in the wider markets that might see these price reductions halt, or even reverse ’, says Monica. ‘Some of the press have been keen to promote sub-4% rates, but these rates are not available to all borrowers. To access a rate like this, you will need to be borrowing 60% or less than the value of their property. That said, a person with a smaller deposit will still get a much better deal than they would have done in the second half of 2023.’
If you are due to remortgage this year and you’re worried about rates being higher than they were when you took out your current mortgage loan, the key is to seek expert advice. Speak to an experienced mortgage broker who will be able to source the right mortgage deal for you.