A pricing war amongst banks and building societies has seen mortgage rates fall to their lowest level in nearly two years.
The rates are now lower than they have been since the disastrous Mini Budget under Liz Truss in 2022.
A cut in the base interest rate from 5.25% to 5% by the Bank of England earlier this month has encouraged lenders to lower rates.
Lowest rate
NatWest is now offering a 3.83% five-year fixed rate, the lowest available since the end of September 2022, according to broker L&C, The Times reports.
And seven of the country’s 10 largest lenders are now offering fixed-rate deals below 4%. Other lenders to have cut their rates include Barclays, Halifax, HSBC, and Nationwide.
Nationwide was the first lender to reduce its fixed rate below 4% at 3.99% last month to break a trend that had lasted many months.
Inflation rose to 2.2% recently, but the increase was less than expected by analysts.
Variable rate misery
Meanwhile though, around 600,000 homeowners could be paying thousands extra on their mortgage because they are still on standard variable rates (SVR), and the average SVR is currently 8.16%, according to Moneyfacts.
And more than half a million mortgage holders are currently on these deals, according to banking trade body UK Finance. The Daily Telegraph reports.
Asking prices increased by 0.2% during July across England and Wales – the seventh consecutive monthly rise – and are now up 1.2% compared with 2023.
Prices increased again in all English regions except the North-West and South-East, where they remain unchanged, as well as in Wales and Scotland, according to the latest Home.co.uk Asking Price Index (HAPI).