Mortgage rate begins to ease
COSTS DOWN AFTER KWARTENG MESS
MORTGAGE rates have fallen below the 6% mark for the first time since September’s bungled mini-Budget.
Figures from industry number crunchers at Moneyfacts show the average rate on a five-year fixedrate mortgage had dropped to 5.95%, the lowest for seven weeks, down from 6.5% a month ago.
The fall is good news for would-be borrowers and the level could “fall further still,” Moneyfacts suggested.
However, it is too late for those who took out a new fixed-rate mortgage deal in recent weeks, and who are now locked into higher costs.
Mortgage rates jumped following the mini-Budget, when financial markets were spooked by the then-chancellor Kwasi Kwarteng’s tax slashing plans.
Gilt yields – government borrowing costs – rose sharply, with a knock-on impact for fixed mortgage rates.
The Bank of England has also been hiking its base rate in an attempt to bring inflation back under control.
Rachel Springall from Moneyfacts said: “Borrowers may well breathe a sigh of relief to see that fixed mortgage rates are starting to fall, but there may be much more room for improvement.
“Borrowers who paused their homeownership plans, or indeed parked the idea of refinancing, may now be tempted to scrutinise the latest deals on offer.”
House sales held steady in October, with the volume of transactions increasing by 2% month-on-month, according to HM Revenue and Customs figures released yesterday.