The average two-year mortgage rate is at a three-year low at 4.99%, the first time it\u2019s dropped below 5% since Liz Truss\u2019s mini-budget in September 2022, Moneyfacts research shows.<\/p>\n
Some deals have dropped below 4% this year, mainly in cases where people had a bigger deposit.<\/p>\n
Despite these positive developments, rates are unlikely to see further significant reductions this year, according to John Morris, mortgage advisor from Pure Property Finance.<\/p>\n
Morris said: \u2013 it definitely won\u2019t reach the 2% mark that we had pre-Covid.<\/p>\n
\u201cThere\u2019s some optimism that rates might soften a little bit throughout the year, but it won\u2019t be a dramatic drop. With inflation starting to ease ever so slightly, lenders are still pricing conservatively and are still reluctant to make any huge changes.<\/p>\n
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\u201cThe Bank of England base rate is a key driver of interest rates. We\u2019ve started to see this come down consistently, with two members of the MPC most recently voting for a 0.5% cut.<\/p>\n
\u201cMortgages may decrease more in the coming months, but won\u2019t reach pre-pandemic levels for a long time.\u201d<\/p>\n
Economists predict the Bank of England to make two more base rate cuts by the middle of 2026, but the pace of reductions is limited by the UK inflation rate, which stood at 3.8% in the year to August.<\/p>\n
Peter Stimson, head of product at MPowered Mortgages, said: \u201cMortgage interest rates are currently unlikely to fall much further.<\/p>\n
\u201cEven though the Bank of England is expected to make two more base rate cuts by the middle of 2026, these have already been priced in by lenders and the pace of the Bank\u2019s cuts is being slowed by Britain\u2019s stubborn inflation problem.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
The average two-year mortgage rate is at a three-year low at 4.99%, the first time it\u2019s dropped below 5% since Liz Truss\u2019s mini-budget in September 2022, Moneyfacts research shows. Some deals have dropped below 4% this year, mainly in cases where people had a bigger deposit. Despite these positive developments, rates are unlikely to see […]<\/p>\n","protected":false},"author":1,"featured_media":4062,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-4061","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-second-home"],"yoast_head":"\n