Data from Moneyfacts UK Mortgage Trends Treasury Report shows a noticeable decline in fixed mortgage rates across all loan-to-value (LTV) tiers, as well as a broadening in overall product availability. This marks the second consecutive month of such declines.
As of the start of October, the average 2- and 5-year fixed rates stand at 6.47% and 5.97%, respectively. The 2-year rate is 0.50% higher than the 5-year equivalent, a slightly smaller gap compared to last month’s 0.51% difference.
Meanwhile, the average Standard Variable Rate (SVR) has continued to increase, reaching a record high of 8.18% in Moneyfacts’ electronic records, which date back to July 2007.
On the other hand, the average 2-year tracker variable mortgage rate declined month-on-month to 6.17%.
In terms of product choices, the market now offers 5,495 mortgage options, the highest level since March 2008. At the 75% LTV tier alone, a record number of 1,014 deals are currently available.
The average shelf life for these products has risen to 16 days, extending for three straight months from a low of 12 days in July.
Rachel Springall, finance expert at Moneyfacts, offered her insights: “Fixed mortgage rates have fallen across the spectrum, signalling a positive change in the market. Overall, the average 2- and 5-year fixed rates have now fallen for the second month running, so borrowers could find cheaper deals to choose from.”
Springall further elaborated on the burgeoning product options, stating: “There is good news for borrowers with a limited deposit as product choice has grown consecutively over the past three months, at 90% and 95% loan-to-value.
“The volume of deals in each sector has blossomed to a level not seen since before the fiscal announcement.”
However, she also cautioned that borrowers who are about to transition from fixed rate deals should be wary. “The average Standard Variable Rate (SVR) rose to 8.18% at the start of this month, standing at a record high. Borrowers would be wise to seek independent advice to go over their options or speak with their lender if they are struggling to make repayments.”
