Average fixed volumes in the two years since the truss budget are below 5%: Monetary Facts – Mortgage Strategy

Fixed mortgage rates on average two years have fallen by 5% for the first time since former Prime Minister Liz Truss’ mini budget.

The two-year residence duration hit 4.99% today, and it fell 5% for the first time since September 29, 2022, when it was 4.87%.

This was a few days after the Small Truss Mini Budget on September 15, which triggered a collapse in the UK financial markets, leading to higher mortgage rates, lower pound value, the danger of widespread failures throughout the pension industry and increased the cost of UK government borrowing.

“The average two-year fixed mortgage rate drops below 5% for the first time since the 2022 Liz Truss Mini budget is a symbolic turning point.

“While the cost of borrowing is still much higher than the rock minimum in the years before the fiscal event, this milestone shows that lenders are competing more aggressively for business competition.”

The fall was the Bank of England interest rate drivers lowered the base rate by a quarter last week, the third decrease in the year and the lowest level since March 2023.

However, inflation rose to 3.6% in the year to June, partly because food and clothing costs are higher and still exceeding the bank’s 2% target.

France added: “While mortgage rates follow the emotional music set by continuously cutting the Bank of England’s base rate, homeowners and first-time home buyers may have to wait longer for greater cuts.

“Inflation is expected to soar at a 4% rate in the fall, and it won’t return to its 2% target until 2027 or above, which could mean the base rate will last longer at its current level.”

The average five-year residential restoration rate today is 5%, down one basis point from yesterday.

Starting yesterday, the average purchase volume for two years today is 4.90%.

MoneyFacts added that the average five-year BTL mortgage loan was fixed at 5.23% today, which was not changed yesterday.