The average five-year fixed-rate mortgage fell by 7 basis points to 5.79% from a week ago, data from Rightmove shows, as markets bet that the Bank of England is nearing the end of its rate-rising cycle.    

However, an average five-year fixed-rate home loan is up from 3.89% a year ago, as the central bank has hiked rates for more than 18 months.  

The average monthly mortgage payment on a typical first-time buyer property (a home with two bedrooms, or fewer) at £223,614, on a five-year fixed 85% LTV mortgage, is now £1,204 per month over 25 years, compared to £992 per month a year ago.  

The data comes after the Bank of England lifted the base rate by 25bps to 5.25% earlier this month, its 14th consecutive rise taking it to the highest level for 15 years.       

The central bank is battling inflation, which dropped to 6.8% in the year to July from 7.9% in June, but still remains almost three-and-a-half times higher than its 2% target.        

However, lenders say swap rates have fallen from their early July peak, allowing many to cut rates.      

Markets are betting that the central bank will raise the base rate to around 6% by the end of the year, before beginning to fall in 2024.     

Rightmove adds that the average two-year fixed mortgage rate is down by 6 basis points to 6.40% from a year ago, but up from 3.77% a year ago.  

Rightmove mortgage expert Matt Smith says: “The positive direction for rates continues this week albeit a little more slowly, with five-year rates edging down slightly more than two-year equivalent products.   

“Swap rates are broadly flat week-on-week in response to a range of economic indicators published last week, but we should get more sense of any impact in the coming days.   

“We are likely to see a continued period of stability for home-movers at least for now, and while the market remains sensitive to any surprises, it appears that lenders will continue to price competitively where they can.”