Average mortgage rates have fallen for the first time in months.

Both two and five-year fixed-rate deals have dropped, according to data from financial information company Moneyfacts.

The average rate on a two-year fixed deal is now 6.79%, down from 6.81% on Wednesday, while the average five-year rate dipped to 6.31%, a decrease from 6.33% on the day before. The majority of UK mortgage holders are on fixed rate deals.

More than 400,000 people were expected to move off existing fixed deals between July and September, meaning they are likely sign up to higher monthly mortgage bills.

Fixed mortgage rates had been consistently rising since May when the rate of inflation fell less than expected.

Spreaker

This content is provided by Spreaker, which may be using cookies and other technologies.
To show you this content, we need your permission to use cookies.
You can use the buttons below to amend your preferences to enable Spreaker cookies or to allow those cookies just once.
You can change your settings at any time via the Privacy Options.


Unfortunately we have been unable to verify if you have consented to Spreaker cookies.
To view this content you can use the button below to allow Spreaker cookies for this session only.

Enable Cookies
Allow Cookies Once

Click to subscribe to the Sky News Daily wherever you get your podcasts

Not every average mortgage rate has decreased. The average two year tracker mortgage rate is the same as on Wednesday, 6.03%.

More on Interest Rates

Related Topics:

Behind the decrease is the surprise drop in the rate of inflation, which led to lower interest rate forecasts.

It’s now expected that the Bank of England will need to do fewer base interest rate hikes to bring inflation to its 2% target.

Prior to the inflation announcement the Bank’s base interest rate had been expected by some to exceed 6% but is now estimated to peak at 5.75%.

Please use Chrome browser for a more accessible video player


2:05

Sky’s Ed Conway talks us through the UK’s inflation data announcement and the impact on interest rates.

The lower expected rate is now being priced in by mortgage lenders.

Overall, the mortgage bills for anyone who has recently agreed a new fixed rate are still up markedly from the years of ultra low interest rates. Less than two years ago, in October 2021, the average rate on a five year deal was just 2.55%.

More than 2.4 million fixed-rate deals were set to expire from summer to the end of 2024, the banking industry trade body, UK Finance, said.