More cuts to mortgage rates this week will have given further hope to homebuyers, who can now find several deals from the biggest mortgage lenders in the market at under 5%. While sub-5% deals had been available to borrowers looking for a 2-year fixed rate mortgage for some time now, none of these were offered by the largest lenders in the market.
Last week saw Nationwide become the first of the big six lenders to release a 2-year fixed rate mortgage deal that dipped below 5%. This was followed by rate cuts across a number of leading lenders, bringing many below 5% for similar mortgage deals.
Which mortgage rates have reduced?
Barclays, Halifax, HSBC, Nationwide, NatWest, Virgin Money and TSB have reduced a number of mortgage deals over the last 2 weeks. Most rate reductions are for borrowers who are looking to purchase a property and are mainly concentrated in fixed-rate mortgage deals across both 2 and 5-year fixed offers.
Yorkshire Building Society, part of the Virgin Money group, has cut its 2-year fixed mortgage interest rate across multiple loan-to-value (LTV) ratios, including 60%, 80% and 90% LTV. Its rates are among the most competitive for this type of deal. However, rates are expected to change over the coming weeks so it is best to check for current mortgage deals using our mortgage comparison tool.
The deals available for 5-year fixed mortgages had remained fairly static, but this week has seen the best rate in this space reduce by 0.2 percentage points. A similar reduction in interest rates can be seen for first-time buyers looking for 95% LTV mortgage deals, which could help those with smaller deposits find mortgage deals that fit their affordability limits.
Data from Moneyfacts, a retail financial data provider, suggests that "average rates for both a two-year and five-year fixed deal fell for a third consecutive month at the start of November. The average two-year fixed rate stood at 6.29%, down from 6.47% in October. Meanwhile, the average five-year fixed rate fell to 5.86% from 5.97% during the same period." The data provider also confirmed that the average shelf life of a mortgage product increased from 12 days earlier this year, in July, to 20 days currently - another encouraging sign of stability in the market.
How mortgage rates have changed
We reported on Nationwide's 4.99% 2-year fixed mortgage deal last week, citing the Bank of England’s decision to keep the base rate at 5.25% at the last review as a spark for optimism that rates would start to reduce sooner than expected. This week’s better-than-expected inflation rates are likely to increase optimism amongst mortgage brokers and borrowers that the current competition to win mortgage business will broaden over the coming weeks and months.
You can see here how mortgage rates have changed over the last 3 months - the below tables show a snapshot of the best rates available across 2-year and 5-year fixed rate deals at 60%, 80% and 90% LTV.
2-year fixed rate deals Sept - Nov 2023
| Loan-to-value | September | October | November |
| 60% | 5.34% | 5.10% | 4.94% |
| 80% | 5.62% | 5.58% | 5.14% |
| 90% | 5.70% | 5.70% | 5.34% |
Rates based on some of the cheapest deals available during each month
5-year fixed rate deals Sept - Nov 2023
| Loan-to-value | September | October | November |
| 60% | 4.82% | 4.74% | 4.48% |
| 80% | 5.02% | 4.85% | 4.76% |
| 90% | 5.28% | 5.20% | 4.92% |
Rates based on some of the cheapest deals available during each month
What do lower mortgage rates mean for borrowers
Borrowers are looking for ways to reduce the cost of their mortgage and the foremost way that this will happen is by getting a lower interest rate. For every 1% reduction to the interest rate charged on a £100,000 mortgage over 25 years, you would save £57 per month on your monthly mortgage payment.
House prices have not reduced by the degree expected earlier this year, so securing the property of your dreams may be hard work without some extra wriggle room created by these rate cuts. You can read more about house prices in our article, "What is going to happen to UK house prices?".
How to secure the best mortgage rates in the market
Anyone looking to secure the best mortgage rate in the current house buying market will be cautiously optimistic at the sight of more mortgage deals being offered. However, with many factors to consider, choosing the right mortgage deal can be tricky. You will need to consider lending criteria that can differ between lenders, the fees that may be associated with each deal, and whether it provides you with the security your personal circumstances and priorities dictate. While we update mortgage rates in our "Best mortgage rates in the UK" article, these can change quickly and only provide you with headline information. This means that the deals that you are looking at may not be best suited to your needs and you may not fit the lending criteria.
The best way to navigate the mortgage market is to speak with a qualified mortgage expert to gain useful guidance and insight. Mortgage applications can be fairly taxing due to the amount of supporting evidence and checks that are carried out, which may hinder some borrowers due to a lack of understanding of what lenders are looking for. In order to avoid wasting your time and potentially even tarnishing your credit record with failed mortgage applications, you should engage with a mortgage professional.
Mortgage experts at the online mortgage brokerage, Habito* are well versed in how to get you the mortgage offer you need and do not charge a fee. Many of its customers enjoy the ease of being able to progress their property purchase without attending numerous physical meetings with a mortgage broker. Should you prefer to see a mortgage adviser face-to-face, you can source a number of vetted financial professionals using the online directory service, VouchedFor*.
If a link has an * beside it this means that it is an affiliated link. If you go via the link, Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. The following link can be used if you do not wish to help Money to the Masses or take advantage of any exclusive offers - Habito, Vouchedfor
