According to Moneyfacts, since December 2023, the average 2-year fixed rate has decreased from 6.04% to 5.93%, and the average 5-year fixed rate has dropped from 5.65% to 5.50%.
However, these rates have risen from last month, with the 2-year fixed rate increasing from 5.91% and the 5-year fixed rate from 5.48%.
The average rate for a 10-year fixed mortgage has increased from 5.96% to 6.03% since December 2023 and from 5.97% since the start of May 2024.
The average standard variable rate (SVR) stands at 8.18%, down slightly from 8.19% in December 2023, with no change month-on-month.
Average mortgage rates
| Dec-21 | Jun-22 | Jun-23 | Dec-23 | May-24 | Jun-24 | |
|---|---|---|---|---|---|---|
| SVR | 4.40% | 4.91% | 7.52% | 8.19% | 8.18% | 8.18% |
| 2-year fixed | 2.34% | 3.25% | 5.49% | 6.04% | 5.91% | 5.93% |
| 5-year fixed | 2.64% | 3.37% | 5.17% | 5.65% | 5.48% | 5.50% |
| 10-year fixed | 2.97% | 3.36% | 5.25% | 5.96% | 5.97% | 6.03% |
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “The rising cost of mortgages may cause deep concern for borrowers about to come off a fixed rate deal and needing to refinance.
“Affordability is a pressing point for both homeowners looking to refinance and new buyers, so those struggling to see how they can afford mortgage repayments will no doubt be desperate for interest rates to come down.
“Homeowners unsure on whether to lock into a new fixed rate mortgage may still find it more affordable than falling onto a Standard Variable Rate (SVR), which stands above 8%.
“This rate has almost doubled since the Bank of England started increasing base rate back in December 2021. A typical mortgage being charged the current average SVR of 8.18% would be paying £287 more per month, compared to a typical two-year fixed rate (5.93%).
“Due to volatile swap rates, lenders have been increasing fixed mortgage rates, but are also withdrawing some deals priced below 5%.
“As a result, the average 2-year fixed rate is nearing where it stood six months ago, undoing the positive rate cut momentum seen during the first quarter of 2024.
“The average 5-year fixed rate has remained above 5% since June 2023, dipping above and below 6% over the past six months.
“At present, it’s cheaper to lock into a 5-year fixed mortgage than a 2-year deal, based on average rates, which has been the case since October 2022.
“First-time buyers who are struggling to get their foot onto the property ladder and don’t have the ‘Bank of Mum and Dad’ to lean on may feel getting a mortgage is too far out of reach right now.
“Regardless, the uncertainty surrounding interest rates should make it vital for borrowers to seek advice from an independent financial adviser to review all the options available to them.”
