Flurry of mortgage rate cuts as average five-year fix finally goes back below 6%

The average five-year fixed mortgage rate has dipped below 6 per cent, as the cost of borrowing for homeowners continues to fall. 

The typical new five-year fixed mortgage is now priced at 5.99 per cent, down from 6.03 per cent on Wednesday, according to financial information service Moneyfacts. 

The last time the average five-year rate, which includes all deposit sizes, was that low was at the beginning of July. By 19 July, the typical five-year rate raced to 6.33 per cent. 

It comes as a flurry of lenders have announced that they will be slashing their mortgage rates. 

Cheaper deals: The average five-year fixed mortgage is now priced below 6%, according to Moneyfacts – as several lenders have brought their rates down

Halifax is set to launch a five-year fixed rate at 4.93 per cent next week, which would be the cheapest on the market. 

Barclays and Clydesdale Bank have also announced a series of mortgage rate cuts this afternoon.

Two-year fixed deals remain more expensive than five-year. This is partly because they are in higher demand, as borrowers are taking shorter fixes in the hope that rates will get cheaper over the next few years. 

> Check the best mortgage rate you could apply for based on your home value 

Moneyfacts says that the average two-year fixed mortgage currently has a rate of 6.5 per cent, down from 6.53 per cent the day before. 

Deals are available at substantially cheaper rates than these averages, especially for those with more than 40 per cent equity in their property or a 40 per cent deposit to put down. 

We have outlined some of the cheapest rates below, and you can also search for the best deal for your mortgage size and deposit using our mortgage rate finder.  

Simon Gammon, managing partner at broker Knight Frank Finance, said: ‘Lenders continued to cut mortgage rates in the wake of better inflation figures and the Bank of England’s decision to hold the base rate at 5.25 per cent this month, which will do a lot to improve sentiment in the property market.’

However, he added that borrowers should not expect rates to go much lower in the near future.  

‘We do expect more, marginal cuts during the weeks ahead, but that will soon reach a plateau,’ Gammon added. 

‘The best fixed rate deals already start with a four, and we expect rates to settle in that range until the Bank of England opts to cut the base rate, which is unlikely before next spring at the very earliest.’

With new mortgage rates being launched regularly, Nicholas Mendes, mortgage technical  manager at broker John Charcol, had this advice for anyone in the middle of a purchase or remortgage application: 

‘This afternoon has really kicked off between the lenders, in quick succession their has be a flurry of lender advanced notices from lenders.

‘For anyone with an application in play, speak to a broker to see whether you can be getting a better deal than what was submitted originally.

‘Likewise for those not using a broker, now is the chance to speak to someone to ensure you get the best deal now, but also moving forward.’

This post first appeared on Dailymail.co.uk