Mortgage rates drop for second month in a row

Data from comparison website Moneyfacts shows typical fixed rate mortgages have fallen across the board for the second month in a row.

The overall average two- and five-year fixed rates fell between the start of September and the start of October, to 6.47% and 5.97% respectively. 

The average two-year fixed rate stands at 0.50% higher than the average five-year equivalent, a marginally narrower gap than the 0.51% difference last month.

Product choice also rose month-on-month to 5,495 options, the highest level of availability in more than 15 years, according to Moneyfacts.

It means the cost of borrowing will be slightly cheaper for buyers looking to make a purchase although rates are still above what many have been used to in recent years.

However, the average ‘revert to’ rate or Standard Variable Rate (SVR) has continued to climb. At 8.18%, this rate is at the highest level on Moneyfacts’ electronic records.

Rachel Springall, finance expert at Moneyfacts, said: “Fixed mortgage rates have fallen across the spectrum, signalling a positive change in the market. Overall, the average two- and five-year fixed rates have now fallen for the second month running, so borrowers could find cheaper deals to choose from.

“These are encouraging signs for borrowers who may be looking for a new fixed rate deal, but they still may be on the fence about locking in, hoping rates will fall further in the weeks to come.”