Rachel Springall, a finance expert at Moneyfactscompare.co.uk, said that before September 2025, the average mortgage rate had not dipped below 5% since September 2022
UK households have been told to act to snap up the cheapest mortgage deals as rates drop back below 5%. Rachel Springall, a finance expert at Moneyfactscompare.co.uk, said that before September 2025, the average mortgage rate had not dipped below 5% since September 2022 – when Conservative Party Prime Minister Liz Truss was in charge.
Ms Springall added: “Borrowers will no doubt be thrilled to see mortgage rates drop, particularly the millions due to come off a cheap fixed rate before the year is over.
“It is a notable milestone to see the Moneyfacts average mortgage rate drop below 5%, although it remains uncertain on how long this can be sustained.”
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Karen Noye, mortgage expert at Quilter, said: “In this environment, seeking professional mortgage advice is vital. A mortgage advisor can help you navigate the fast-changing market, compare deals across lenders, and secure the best product for your personal circumstances.
“This will include assessing the most cost-effective options, as many lower rate deals will come with fees, which can sometimes outweigh any perceived ‘savings’.
“It’s important to remember that locking in a new deal early can help you budget more effectively, particularly for those remortgaging and potentially upping their monthly payments if they are moving from a lower rate deal.
“What’s more, if rates drop before your new mortgage begins, most lenders will allow you to switch to a cheaper deal.“
Nick Mendes of John Charcol brokers said: “Over the past few months, there has been a clear shift in borrower preferences, with many now choosing two-year fixes over the five-year deals that had long been the default.
“This year, borrowers coming off fixed rates will largely fall into two groups: those who’s low five-year fixed rates date back to the pandemic era, and those who took two-year deals following the rate peaks after the Truss-era market shocks.
“With mortgage rates widely expected to continue trending downwards, many borrowers see shorter-term fixes to lock in a lower rate now while keeping the option to benefit from future cuts sooner.”