The mortgage market has taken another step toward affordability, with rates dipping below 4% for the first time in months.
On the back of the Bank of England’s latest base rate reduction, lenders are sharpening their offers — and first-time buyers stand to gain the most.
Lenders Slash Rates — Some Deals Now Below 4%
NatWest is now offering two-year fixed mortgages from just 3.73%, depending on deposit size, marking one of the most competitive offers in the market.
Industry data from Uswitch shows the average two-year fixed rate currently sits at 4.68%, while five-year fixed deals average 4.83%. The downward trend comes after the Bank of England cut its base rate to 4% — the lowest since March 2023 — easing monthly repayments for many homeowners.
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A Year of Significant Rate Movement
Figures from Rightmove reveal the average two-year fixed rate at 80% loan-to-value (LTV) has dropped from 5.21% to 4.38% over the past 12 months. Five-year fixed rates at the same LTV have fallen from 4.91% to 4.52%.
Matt Smith, mortgage expert at Rightmove, said the Bank’s third cut this year is prompting lenders to move quickly on pricing. While he doesn’t expect dramatic drops, competition among lenders remains intense, supported by the largest supply of homes for sale in a decade and easing buyer affordability criteria.
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