Homeowners have seen the average 5-year mortgage rate fall again for the 20th consecutive week to 5.07% as the Bank of England decided to hold interest rates.
Despite still being at very high levels, the current 5-year mortgage has eased since its July peak of 6.11%, according to figures from property site Rightmove.
The slight relief comes as the Bank of England has left interest rates unchanged for the third consecutive time at 5.25%. This is still a 15-year high and just to things in perspective, interest rates were at 0.1% in 2020.
“No news is often good news when it comes to the mortgage market, and yet another week – the 20th in a row – of marginal percentage point drops is positive news for home-movers,” Matt Smith, Rightmove’s mortgage expert, said.
The BoE has left UK interest rates on hold at a 15-year high of 5.25% in its final meeting of the year.
Read more: Bank of England holds interest rates amid expectations of cuts in 2024
The monetary policy committee (MPC) voted by a majority of 6-3 to keep the bank rate steady for the third time in a row as it tries to bring inflation lower.
As mortgage rates ease, someone on an average 5-year deal has seen their payments fall from £2,068 in July, to £1,793 now.
For first-time buyers taking out this type of mortgage, the monthly mortgage payment on a typical first-time buyer home has reduced from £1,254 in July, to £1,111 now, Rightmove said.
Additionally, the average 2-year fixed rate has decreased from 5.55% to 5.48%, showcasing a broader positive trend in the mortgage market.
Read more: UK households expect Bank of England to hike interest rates in 2024
While the possibility of an interest rate hold today might allow further mortgage rate drops, lenders may hold back until after Christmas to capitalise on the expected surge in demand come January, according to Rightmove.
“It’s likely that lenders may hold back offering these to borrowers this side of Christmas, to take advantage of the seasonal jump in demand that usually happens in January,” said Smith.
Watch: Rightmove reveals average rents in London and Britain overall
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