Commenting on the five-year mortgage rate drop, Mr French said: “The slow and steady fall in the cost of borrowing over the last year combined with strong average earnings growth has helped to marginally boost affordability for many homeowners and homebuyers.”<\/p>\n
However, he thinks the latest inflation reading of 3.8% has effectively stopped the chance of seeing another base rate cut in 2025.<\/p>\n
“As a result, a few modest mortgage rate reductions are the best borrowers can probably hope for in the short term as lenders adjust to prospect of higher rates for longer,” Mr French added.<\/p>\n
Peter Stimson, director of mortgages at the lender MPowered, said the five-year average rate drop was good news for anyone looking to buy a house or remortgage but warns “average rates can be a bit misleading.”<\/p>\n
He said: “Much lower rates are available. If you have a sizable deposit or have built up equity in your home, you could well get a fixed interest rate below 4% – irrespective of whether you want to fix for two, three or five years.”<\/p>\n
Lenders are also offering more choice, with 7,031 residential mortgage products available, which is up from 6,992 on the previous working day.<\/p>\n
Hundreds of thousands of borrowers are due to re-mortgage this year.<\/p>\n
UK Finance, the banking industry group, said 900,000 fixed rate deals are due to expire in the second half of 2025.<\/p>\n
Mortgage rates are still higher than in the years before the mini-budget.<\/p>\n