Overview
- Average two- and five-year fixed mortgage rates fell by about 0.16 percentage points and 0.11 percentage points respectively to roughly 5.52% after lenders reacted to lower swap rates.
- Mortgage product choice has risen for a third month to about 7,177 deals, though the market still has roughly 307 fewer offers than it did earlier in the year.
- Analysts say the cuts were driven by moves in swap markets that link government bond moves to mortgage pricing, so any spike in geopolitical risk would likely raise swap rates and mortgage offers.
- Industry advisers are urging caution because the resumption of US–Iran strikes could prompt lenders to withdraw cheap deals again and because upcoming UK inflation data and a Bank of England decision could change lender behaviour.
- Borrowers can benefit if they lock in improved fixed rates now, but advisers warn timing is risky and homeowners approaching renewal should weigh the chance of further falls against the risk of a sudden rise in rates.