Homebuyers are benefiting from mortgage rates dropping to a six-month low.
Data from comparison website Moneyfacts shows average mortgage rates on the overall two- and five-year fixed rate deals fell month-on-month by 0.21% and 0.18% respectively during September.
The overall average two- and five-year fixed rates fell between the start of August and the start of September, to 5.56% and 5.20% respectively, Moneyfacts said.
Meanwhile, the average two-year fixed rate is 0.36% higher than the five-year equivalent.
Rates are dropping at higher LTVs but remain high, the figures show, with an average 95% loan-to-value (LTV) on a five-year fix at 5.56% while someone on a 60% LTV is typically paying 4.7%.
However, product choice has fallen overall fell slightly month-on-month from 6,657 in August to 6,523 as of early September.
It comes after the Bank of England’s August interest rate cut and as NatWest last week released the latest best buy rate at 3.71% for a five-year fix on a 60% LTV.
The mortgage market now appears in a better position than the aftermath of the 2022 mini-Budget that set pricing soaring.
Rachel Springall, finance expert at Moneyfacts, said: “This month marks two years since the fiscal announcement took place, and subsequent unsettled times saw significant rises to mortgage rates.
“Fixed mortgage rates are now much lower than they were this time last year, but it remains the case that the average five-year average rate is lower than its two-year counterpart, which has been the case since October 2022. The start of August also brought the first Bank of England base rate cut in over four years, which has led to reductions in both the average two-year tracker rate and average Standard Variable Rate (SVR), but fixed rates remain lower on average.
“Mortgage availability was impacted during August, as product choice felt its biggest month-on-month drop since February 2024, quite a contrast to the notable uplift in products seen during previous months.
“A deeper dive into the LTV sectors revealed the biggest drops were at 85% and 80% LTV of 27 and 25 deals respectively. A fall in choice in these areas may come as disappointing news to those borrowers with limited deposits or equity, but choice is more plentiful than a year ago. Those borrowers ready to switch their mortgage would be wise to seek independent advice to go over their options.”