Cost of fixed-rate mortgages set to fall

The Bank of England’s suggestion that inflation may come under control sooner than expected should send interest rates on five-year fixed mortgages to below 4% in the near future, experts say. The average rate on two and five-year fixes fell from 6.47% and 6.32% at the start of November to 5.44% and 5.2% at the start of this month, according to the data firm Moneyfacts. The Bank rate is now at a 14-year high of 4% after the tenth successive increase on Thursday. The cheapest mortgage now starts with a 3 for the first time since September, with Lloyds and Virgin Money both offering ten-year fixes at 3.99%. Even tracker loans, which are linked to the base rate and will increase in line with it, have fallen from an average of 4.48% at the start of January to 4.39% this month for a two-year fix.

Financial Times (03/02/2023)   The Times (03/02/2023)