The average rate of both 2- and 5-year fixed rate deals has fallen after months of increases on the back of sticky inflation, volatile swap rates and Bank of England interest rate hikes.
Data from Moneyfacts shows that the average rate on a 2-year fixed rate mortgage now stands at 6.79%, down from 6.81% last week.
The average 5-year rate has also declined reducing to 6.31%.
Yesterday ONS figures revealed that inflation had slowed to 7.9% in June, down from 8.7% the month before.
Experts have said that there is now less pressure on the Bank of England to increase interest rates next month.
While a 14th consecutive rise looks inevitable it is expected to be smaller than markets were anticipating.
However, inflation remains almost four times higher than the Bank’s 2% target – and far above that of other Western countries.
In the US inflation has dropped to 3% while in the Eurozone it is 5.5%. The Bank of England will announce its decision on interest rates on August 3rd.
