February Sees Biggest Mortgage Rate Drop Since 2022

Recent data has shown that 2 year fixed mortgage rates available to borrowers has fallen to its lowest point since December 2022, seeing its biggest month-to-month fall since that date.

According to the financial information website Moneyfacts, last month (Jan 2024) the average two year fixed rate was sitting at 5.93% and this month it has dropped to 5.56% in the lowest drop in just over a year. Five year fixed rates have also seen a decrease of 0.37% from 5.55% to 5.18% between January to February.

Moneyfacts’ financial expert Rachel Sprignall had this to say on the fall: “Borrowers searching for a new mortgage deal may be delighted to know fixed mortgage rates continued their downward trend, with the average two-year fixed rate dropping by its biggest margin since December 2022.

“Those borrowers who have waited patiently in recent months to re-finance, or indeed are preparing for when their mortgage deal expires, would be wise to review rates, as lenders are closely monitoring the volatile swap rate market, which tends to influence fixed-rate pricing.”

This is positive news for borrowers having seen the rates rise with last year particularly seeing early incremental increases. This large fall may be cause for optimism for further decreases in rates over the coming year but it is not easy to predict more sizable reductions according to Rightmove. This will also be dependent on a multitude of factors including inflation, falling swap rates, and no unexpected shocks to the economy. 

Rightmove also states that it is thought interest rates could flatline before decreasing as the year progresses and that it’s expected for fixed-rate mortgage products to start to take on some of these reductions.

Rightmove also states that it is thought interest rates could flatline before decreasing as the year progresses and that it’s expected for fixed-rate mortgage products to start to take on some of these reductions.

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Written By Joseph Climance