The average 5-year fixed rate mortgage has fallen from 2.84% to 2.79% in the last three weeks according to Moneyfacts’ Residential Mortgage Analyser.
The difference between the average 2 and 5-year fixed mortgage rates has reduced to 0.32% over the same period.
Darren Cook, finance expert at Moneyfacts, said: “It seems that interest rate competition has stepped up in the five-year fixed rate mortgage market, with the average rate falling from 2.84% to 2.79% since the beginning of August 2019.
“Furthermore, the differential between the average two-year fixed rate at 2.47% and the average five-year fixed rate at 2.79% has reduced from 0.35% to 0.32% over the same period, perhaps giving the longer-term products a slight edge among borrowers open to either option.
“The cut to five-year fixed mortgage rates will be welcome news to those borrowers who are looking to lock into a slightly longer period and may be unsure which direction interest rates will move next amid the ongoing economic uncertainty. What will be certain for these borrowers is that their monthly mortgage repayment will remain unchanged for the next 60 months.
“The largest cuts to five-year fixed mortgage rates have taken place in the maximum 80% loan-to-value sector, which has fallen by 0.08% to 2.79% since the beginning of the month.
“This is closely followed by the maximum 70% and 85% loan-to-value sectors, which both fell by 0.06% to 3.00% and 2.81% respectively.
“Potential first-time buyers may feel a little hard done by, as the average rate at maximum 95% loan-to-value has remained unchanged at 3.63% since the beginning of the month.”