According to a financial information site, the market average two-year fixed mortgage interest rate in February recorded the largest monthly decline since December 2022.
The average two-year fixed mortgage rate across all deposit sizes was 5.56% at the start of February 2024, down from 5.93% at the start of January this year.
The 0.37 percentage point decline is the largest monthly decline recorded by Money Facts since December 2022.
Comparing early January 2024 and early February this year, the 5-year fixed mortgage interest rate fell slightly from an average of 5.55% to 5.18%.
Rachel Springall, finance expert at Moneyfacts, said: “Borrowers looking for a new mortgage deal will find that fixed mortgage rates continue to fall, with the average two-year fixed rate falling by the most since December 2022. You will be glad to know.
“Borrowers who have been waiting to refinance in recent months or are preparing for their mortgage deal to expire would be wise to review their interest rates. This is because lenders are closely monitoring the volatile swap rate market. Pricing.
“There are strong expectations that fixed rates will fall further and whether now is the right time to refinance will depend on your individual circumstances.
“Lenders are constantly reviewing their ranges and with the noise surrounding future interest rate expectations, interest rates are likely to fluctuate in the coming weeks.”
Some borrowers may want to sit on their lender's standard variable rate (SVR) while they decide what to do.
According to Moneyfacts, the average SVR in early February was 8.17%.
Ms Springall added: “The average two-year and five-year fixed rates are significantly lower than the average SVR. It is wise for individuals to seek advice from an independent broker to see if changing their mortgage deal could save them a significant amount on their monthly repayments.”
Mr Springall said mortgage rates had also fallen for the first-time buyer segment of the market.
She said: “The average two-year fixed rate mortgage (LTV) of 95% has fallen below 6% for the first time since May 2023 (it was at 5.84% in early February) and just over 7% compared to six months ago. Yes.
“Product selection has also increased in this LTV bracket.”
– MoneyFacts used data from the 1st of each month for analysis.
Meanwhile, Nationwide announced Monday that interest rates on some mortgages will rise this week.
The Housing Finance Association said that mortgage interest rates will rise by up to 0.25 percentage points from Tuesday. But some may rise much less.
First-time buyers and home movers will pay 4.49% on a two-year mortgage, while remortgage borrowers will pay 4.54%.
“Swap rates, a key component of mortgage pricing, have been rising and as a result select rates will need to be increased to ensure rates are sustainable,” Nationwide said.