UK borrowers are set to receive some much-needed relief as mortgage rates see their most significant decrease in over a year.
In January, rates for two-year fixed mortgages dropped by 0.37 percentage points, the most substantial decline since December 2022, according to data from Moneyfacts.
The average rate has now reduced to 5.56 percent, a decrease from 5.93 percent at the beginning of January.
This reduction marks the sixth month in a row where both two-year and five-year fixed mortgage rates have decreased.
This trend continues even though market traders have scaled back their predictions on the frequency of rate cuts by the Bank of England this year.
Rachel Springall of Moneyfacts commented, “Lenders are continuously reassessing their portfolios, and rates will likely see some fluctuation in the upcoming weeks due to ongoing speculations about future rate changes.”
She further noted, “Recent statements by the Bank of England suggest that the base rate may remain stable for a few more months. Indeed, the Monetary Policy Committee is expected to wait for solid proof that inflation is under control before contemplating any rate reduction.”
