Sky-high mortgage rates have started to fall this week, offering respite for worried homeowners.
The average two-year fixed-rate mortgage has dropped by 0.11 percentage points, falling to 6.54 per cent from 6.65 per cent last week when rates hit a 14-year high, according to analyst Moneyfacts.
Someone with a £400,000 mortgage would be £662.64 better off on the lower rate over the two-year term.
Rates relief: The average two-year fixed rate mortgage has dropped by 0.11 percentage points this week, falling to 6.54 % from 6.65% last week when rates hit a 14-year high
Lenders have also reduced their five-year deals, with the average rate now at an average of 6.41 per cent, down from 6.51 per cent.
This morning, Santander reduced its two-year fixed rates by up to 0.15 per cent and its five-year deals by as much as 0.5 per cent.
This follows HSBC’s move on Tuesday, as it reduced several of its remortgage rates by 0.11 percentage points. Its cheapest five-year fixed-rate deal is now 5.37 per cent, down from 5.48 per cent.
Coventry Building Society also cut its fixed-rate deals, with its two-year fix at 5.7 per cent and its five-year deal now at 5.34 per cent.
It has also expanded its range to include new two, three and five-year fixes, in a reversal of recent trends as lenders rushed to pull deals from the market following former Chancellor Kwasi Kwarteng’s ‘catastrophic’ mini-Budget.
His successor Jeremy Hunt’s raft of U‑turns on that Budget and the appointment of Rishi Sunak as Prime Minister has calmed the situation.
Dominik Lipnicki, of broker Your Mortgage Decisions, says: ‘The market is in a much better place than it was a few weeks ago. Hopefully the panic is behind us.’
