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The UK’s average two-year mortgage rate has dipped below 6% for the first time in nearly six months.
The rate now sits at 5.99%, falling from 6.01% the day before, according to Moneyfactscompare.co.uk.
The last time the rate was below 6% was on 16 June 2023, when it dropped to 5.98%. The highest it has risen to is 6.68%, on 26 July.
The latest drop is thanks to lenders chopping their fixed rates amid signs that inflation is easing.
A Moneyfactscompare.co.uk spokesperson said: “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,” they added.
Sarah Coles, head of personal finance at investors Hargreaves Lansdown, has said the rate drop “could help bring a chunk of buyers back to the market”.
She said: “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.”
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However, Ms Coles also cautioned that we cannot expect to see the impact on house prices until next…
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