Five-year mortgage rates finally fall back below 6%

FIVE-YEAR fixed mortgage rates have dropped below 6 pc for the fir st time in seven weeks.

The average five-year fix is now 5.59 pc, down from a 1 4-year high of 6 .51 pc last month, says comparison website Moneyfacts. It says two-year fixed rates have also decreased, with deals averaging at 6.13 pc, down from a peak of 6.65 pc in October.

Yesterday Santander and Bar clays both decreased their fix ed- rate deals b y 0.3 percentage points.

Mortgage rates spiralled last mon th in response to Kwasi Kwarteng’s disastrous mini-budget in S eptember. Around 80 pc of mortgages are currently fixed. Rachel S pringall, finance expert a t Moneyfacts, says: ‘Borrowers may well breathe a si gh of r elief to see tha t fixed mortgage rates are starting to f all, but there maybe much more room for improvement. Rates could fall further still, but there is no clear answer as to how quickly that may be.

‘Borrowers may feel they have to be patient for a little while longer before they commit to a new fixed mortgage.’

Tracker rates have also started to f all. Santander reduced its tracker range by 1.25 percentage points yesterday. And on Monday, Y orkshire Building S ociety decreased its tracker products by up to 1.16 percentage points. Tracker deals are tied to the Bank of England base r ate, which is currently at 3 pc.

They ha ve r apidly incr eased in popularity in the past couple of mon ths following lar ge in terest r ate rises f or fixed mortgage deals.