The average standard variable rate (SVR) has fallen further below 8% month-on-month and stands at 7.48%, down from 8.18% a year ago, the latest Moneyfacts data shows.
The latest figures show that the average two-year fixed rate has fallen from 5.93% to 5.12% since June last year while the average five-year fixed rate has fallen from 5.50% to 5.09%.
Both fixes are down month-on-month with these average rates at 5.18% and 5.10% respectively last month.
On a 10-year fixed rate mortgage, the average rate was 6.03% in June 2024. This rate has fallen to 5.48% and is down month-on-month.
The Moneyfacts average mortgage rate fell to 5.12%, down from 5.17% month-on-month.
It is down from 5.77% since June 2024, but lower than 5.34% in June 2023.
The Bank of England is scheduled to announce the Monetary Policy Committee’s decision on the bank rate today at noon. It is expected that the bank rate will remain unchanged.
Earlier this month, Moneyfacts revealed that average mortgage rates are falling by much smaller margins in June compared to last month, while overall choice of mortgages fell slightly alongside a drop in the average shelf-life of a mortgage.
Moneyfactscompare.co.uk finance expert Rachel Springall says: “Borrowers will be hoping rates continue on the downward trend in the coming months, particularly the millions of consumers due to come off a low rate fixed deal this year.”
“The motivation to secure a new deal is prevalent, as lenders have been busy repricing deals both due to last month’s Bank of England Base Rate cut and swap rate volatility.”
“However, sticky inflation and current global pressures can result in a more cautious approach to rate setting, and such uncertainty can impact swap rates.”
“These developments could spell disappointment for borrowers, but it is worth noting that the market is in a much better shape than seen over previous years, and lenders have been reviewing their stress testing in response to the Government’s plans to boost UK growth.”
“Mortgage prisoners who have not been able to borrow more could now break free of their costly variable rate mortgage and secure a lower fixed rate deal.”
“Indeed, a typical mortgage borrower being charged the current average Standard Variable Rate (SVR) of 7.48% would be paying £365 more per month, compared to a typical two-year fixed rate.”
“First-time buyers remain a crucial part of the mortgage market, as without them, the housing market could stagnate. It is imperative that lenders work hard to support these buyers, to keep the market moving.”
“However, buyers may well be struggling with the cost of living and have no parental assistance nor a significant sum stashed away to put a deposit down to get a mortgage.”
“Thankfully, lenders have been improving their ranges of deals at higher loan-to-values, and the relaxation of stress tests could now enable first-time buyers to get their first foot on the property ladder.”
“New buyers need to seek advice in the first instance to understand the consequences of falling into negative equity if house prices plummet, as this is more of a risk for those borrowing at the highest ends of the loan-to-value spectrum.”
