Mortgage rates experiencing a notable decline
According to Right Move data, the average five-year fixed mortgage rate has fallen below 5% for the first time in two months. As of 3 July, it stood at 4.99%, down from an average of 5.02%. This represents a significant drop compared to last year, when the rate averaged 5.69% in 2023.
The average two-year fixed rate decreased from 5.42% to 5.37%, which is
also lower than the 6.17% recorded last year. This downward trend in mortgage rates
is a welcome relief for many prospective homeowners.
POSITIVE IMPACT ON FIRST-TIME BUYERS
The data also highlighted a beneficial impact for first-time buyers. A first-time buyer’s average monthly mortgage payment has reduced annually from £1,203 to £1,131.
This calculation is based on a mortgage at 85% loan-to-value (LTV) against a typical first-time buyer home worth £227,757 over 25 years.
As of 3 July, the average two-year fixed
mortgage rate for a deal at 60% loan to value (LTV) was 4.82%, consistent with the previous week. However, this tier’s average five-year fixed rate decreased slightly from
4.42% to 4.39%.
TRENDS IN MID-RANGE LTV MORTGAGES
For those with a 75% LTV mortgage, the average two-year fixed rate dropped
marginally from 5.25% to 5.22% over the week. Similarly, the average five-year fixed rate reduced from 4.88% to 4.86%. These rates have gradually declined from 6.03% to 5.56% respectively.
At the 85% LTV level, the average two-year fixed mortgage rate was 5.38%, while the average five-year fixed rate was 4.99%. Both figures are lower than their previous counterparts of 5.42% and 5.01%, which decrease from last year’s rates of
6.17% and 5.68%.
HIGH LTV MORTGAGES SHOW IMPROVEMENT
In the 90% LTV bracket, the average two- year fixed rate was 5.65%, down from
5.68% last week.
This rate is also lower than the previous year’s average of 6.28%. Meanwhile,
the average five-year fixed rate was 5.16% as of 3 July,
slightly down from 5.19% the previous week and from 5.82% the year before.
At the highest LTV bracket of 95%, the average two-year fixed rate was 6.11%, while the average five-year fixed rate was 5.67%.
Both rates are lower than their respective values of 6.12% and 5.74% and are down from the previous year’s rates of 6.75% and 6.08%.
MAKING AN INFORMED DECISION
The overall decline in mortgage rates across various LTV brackets offers a promising outlook for potential homebuyers. Whether you are a first-time buyer or looking to remortgage, understanding these trends can help you make an informed decision.
>> TIME TO LOOK AT WHAT YOUR MORTGAGE OPTIONS ARE? <<
Please contact us for further information or advice on finding the right mortgage solution for your needs.
Cedar Crest Ltd – telephone UK T: +44 (0) 203 883 1017,
HK T: +852 6645 4462
SINGAPORE: +65 8363 9221
– email info@cedar-crest.co.uk
Your home may be repossessed if you do not keep up with repayments.
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