Average fixed mortgage rates have fallen for the first time since the outbreak of the war in Iran, the latest figures from Moneyfacts show.
The average three-year fix is down by 5bps to 5.5% over the past week and the average two-year fix by 3bps to 5.87%.
The average five-year fixed rate has also edged downwards by 2bps from 5.78% to 5.76% since last Friday.
It marks the first week-on-week decline in average fixed rates since the conflict began on February 28.
Some product categories saw steeper reductions, including average three-year fixes at 95% loan-to-value, which fell by 13bps to 5.98% and at 85% LTV, which dropped 9bps to 5.53%.
Average two-year fixes at 70% LTV were also down by 9bps to 5.58% and at 95% LTV, they fell 8bps to 6.4%.
Alongside rate cuts, there has also been an increase in product availability for borrowers with smaller deposits.
Building societies have launched a number of higher loan-to-value deals, including new products at 98% LTV from Cambridge Building Society and 95% LTV ranges from Saffron Building Society and Leeds Building Society.
A number of major lenders also cut rates during the week, including HSBC, Lloyds Bank and Santander.
Across the wider market, lenders including Atom Bank, Halifax, TSB and The Co-operative Bank also lowered rates, although some made increases including Kensington and Principality Building Society.
Moneyfacts personal finance expert Rachel Springall says: “Borrowers may be excited to see a few lenders reducing fixed mortgage rates this week, coupled with more deals launched for those with small deposits.
“The rate moves have led to the first week-on-week fall in average fixed rates since 27 February, a day before the conflict began.
“This is a positive, yet small step, in the right direction, as lenders have been reviewing their rates in line with recent swap rate moves, which are hovering around 4%.
“Prior to the recent ceasefire in the Middle East, there was a notable rise in swap rates, and growing speculations for an interest rate hike by the Bank of England to respond to a projected hike in inflation this year.
“However, the future path of interest rates remains murky, and short-term respites can change quickly.
“Now is the time for borrowers to seek advice to navigate the mortgage maze, particularly as more deals return to the market.
“A ray of light to shine onto the mortgage market this week has been a healthy injection of new higher loan-to-value mortgages from building societies, which should not go unnoticed surrounding overall fixed rate moves.
“Mutuals do more than just competitively price their products, they are champions of innovation and work incredibly hard to support first-time buyers with very small deposits.
“Borrowers may hope this positive momentum in rate cuts and launch of new deals continues, particularly as some of the biggest banks cut rates this week, which includes HSBC, Lloyds Bank and Santander.
“Looking ahead to next week, it will be interesting to see if Barclays will decide to make a move to cut rates as they have not adjusted their residential mortgage rates since the start of April.”
The following lenders made changes this week:
AIB (NI) – reduced by up to 23bps
Atom Bank – reduced by up to 25bps
Coventry Building Society – reduced by up to 5bps and increased by up to 18bps
Family Building Society – reduced by up to 35bpsFoundation – reduced by up to 20bpsHalifax – reduced by up to 35bpsHSBC – reduced by up to 34bpsKensington – increased by up to 20bpsLeeds Building Society – reduced by up to 8bps and increased by up to 10bpsLeek Building Society – reduced by up to 20bpsLloyds Bank – reduced by up to 35bpsNewcastle Building Society – reduced by up to 21bpsNottingham Building Society – reduced by up to 20bpsPrincipality Building Society – increased by up to 23bpsProgressive Building Society – increased by up to 49bpsSantander – reduced by up to 28bpsSkipton Building Society – reduced by up to 21bpsTSB – reduced by up to 45bpsThe Co-operative Bank – reduced by up to 33bpsVida Homeloans – reduced by up to 15bps
