Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner. Facebook Messenger An icon of the facebook messenger app logo. Facebook An icon of a facebook f logo. Facebook Messenger An icon of the Twitter app logo. LinkedIn An icon of the LinkedIn logo. WhatsApp Messenger An icon of the Whatsapp messenger app logo. Email An icon of an mail envelope. Copy link A decentered black square over a white square.

Average two-year mortgage rate dips below 6% for first time in nearly six months

The average two-year fixed-rate homeowner mortgage is sitting below 6% for the first time in nearly six months, Moneyfactscompare.co.uk said (Joe Giddens/PA)
The average two-year fixed-rate homeowner mortgage is sitting below 6% for the first time in nearly six months, Moneyfactscompare.co.uk said (Joe Giddens/PA)

The average two-year fixed-rate homeowner mortgage is sitting below 6% for the first time in nearly six months.

Across all deposit sizes, the average two-year fixed-rate homeowner mortgage on the market dipped to 5.99% on Friday, falling from 6.01% on Thursday, according to Moneyfactscompare.co.uk.

The last time this rate was below 6% was on June 16, when it was 5.98%.

The peak for two-year fixed products this year was reached on July 26, when the average rate hit 6.86%.

Lenders have been chopping their fixed rates amid signs that inflation is easing.

James Hyde, spokesperson at Moneyfactscompare.co.uk,  said: “The average two-year fixed rate has dipped below 6%, for the first time since mid-June this year.

“Having peaked at 6.86% in late July, rates have been gently falling since early August due a combination of factors including falling inflation, base rate pauses, and reductions in swap rates (which lenders use to price fixed-rate mortgages).

“In recent weeks, a number of lenders have again begun to offer sub-5% two-year fixed deals; with lowest rates available UK-wide sitting around 4.75% at present.

“It remains to be seen if the recent rate reductions will continue, as any further rises in inflation, base rate, or swap rates may lead to a reversal.”

The average five-year fixed homeowner mortgage rate on the market eased downwards to 5.60% on Friday, from an average rate of 5.61% on Thursday.

Moneyfacts also counted 5,766 homeowner mortgage products available, up from 5,764 on Thursday.

Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “This could help bring a chunk of buyers back to the market. It would be balm for the agony suffered by sellers over the past few months, as their properties sit unseen on the market and their for-sale signs collect grime. However, we can’t expect to see the impact in house price figures until the spring.

“Mortgage rates have had a torrid year. They shot sky-high in the aftermath of the mini-budget at the end of 2022, so spent the first few months of the year gradually dropping back. This slowed as inflation’s downwards path proved bumpy, and then reversed, climbing gradually from late April.

“In May, when April’s inflation data revealed core inflation had risen, they rose more quickly, and in June, when May’s inflation rate didn’t move at all, they continued their rapid ascent.”

Ms Coles said the rapid rise in mortgage rates had put the brakes on mortgage approvals.

She added: “There’s a good chance that the 6% threshold could be psychologically important for a number of buyers, who decide it’s a good time to take the plunge.

“It’s not going to be a seismic shift. Given that rates are expected to fall further from here – and that drops will accelerate once rate cuts are on the cards, there are plenty who will decide to wait and see. However, in a property market this sluggish, an influx of new buyers will provide some welcome relief for those who have had their home on the market for months without interest.”